Correlation Between Auer Growth and Commonwealth Global
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Commonwealth Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Auer Growth and Commonwealth Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Commonwealth Global Fund, you can compare the effects of market volatilities on Auer Growth and Commonwealth Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Auer Growth with a short position of Commonwealth Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Commonwealth Global.
Diversification Opportunities for Auer Growth and Commonwealth Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Commonwealth is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Commonwealth Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Global and Auer Growth is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Auer Growth Fund are associated (or correlated) with Commonwealth Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Global has no effect on the direction of Auer Growth i.e., Auer Growth and Commonwealth Global go up and down completely randomly.
Pair Corralation between Auer Growth and Commonwealth Global
Assuming the 90 days horizon Auer Growth is expected to generate 1.04 times less return on investment than Commonwealth Global. In addition to that, Auer Growth is 1.41 times more volatile than Commonwealth Global Fund. It trades about 0.05 of its total potential returns per unit of risk. Commonwealth Global Fund is currently generating about 0.07 per unit of volatility. If you would invest 2,028 in Commonwealth Global Fund on August 31, 2024 and sell it today you would earn a total of 137.00 from holding Commonwealth Global Fund or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Commonwealth Global Fund
Performance |
| Timeline |
| Auer Growth Fund |
| Commonwealth Global |
Auer Growth and Commonwealth Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Commonwealth Global
The main advantage of trading using opposite Auer Growth and Commonwealth Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Commonwealth Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Commonwealth Global will offset losses from the drop in Commonwealth Global's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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