Correlation Between Auer Growth and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Growth Allocation 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 Growth Allocation 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 Growth Allocation Fund, you can compare the effects of market volatilities on Auer Growth and Growth Allocation 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Growth Allocation.
Diversification Opportunities for Auer Growth and Growth Allocation
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Auer and Growth is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Auer Growth i.e., Auer Growth and Growth Allocation go up and down completely randomly.
Pair Corralation between Auer Growth and Growth Allocation
Assuming the 90 days horizon Auer Growth Fund is expected to under-perform the Growth Allocation. In addition to that, Auer Growth is 1.84 times more volatile than Growth Allocation Fund. It trades about -0.03 of its total potential returns per unit of risk. Growth Allocation Fund is currently generating about -0.06 per unit of volatility. If you would invest 1,342 in Growth Allocation Fund on September 12, 2024 and sell it today you would lose (7.00) from holding Growth Allocation Fund or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Growth Allocation Fund
Performance |
| Timeline |
| Auer Growth Fund |
| Growth Allocation |
Auer Growth and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Growth Allocation
The main advantage of trading using opposite Auer Growth and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation'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 |
| Growth Allocation vs. T Rowe Price | Growth Allocation vs. Issachar Fund Class | Growth Allocation vs. Artisan Thematic Fund | Growth Allocation vs. Auer Growth Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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