Correlation Between Auer Growth and New World
Can any of the company-specific risk be diversified away by investing in both Auer Growth and New World 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 New World 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 New World Fund, you can compare the effects of market volatilities on Auer Growth and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and New World.
Diversification Opportunities for Auer Growth and New World
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auer and New is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Auer Growth i.e., Auer Growth and New World go up and down completely randomly.
Pair Corralation between Auer Growth and New World
Assuming the 90 days horizon Auer Growth Fund is expected to generate 1.63 times more return on investment than New World. However, Auer Growth is 1.63 times more volatile than New World Fund. It trades about 0.05 of its potential returns per unit of risk. New World Fund is currently generating about 0.05 per unit of risk. If you would invest 1,362 in Auer Growth Fund on September 2, 2024 and sell it today you would earn a total of 406.00 from holding Auer Growth Fund or generate 29.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. New World Fund
Performance |
| Timeline |
| Auer Growth Fund |
| New World Fund |
Auer Growth and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and New World
The main advantage of trading using opposite Auer Growth and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, New World 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 New World will offset losses from the drop in New World'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 |
| New World vs. Aqr Managed Futures | New World vs. Ab Bond Inflation | New World vs. Aqr Managed Futures | New World vs. Fidelity Advisor 529 |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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