Correlation Between Auer Growth and Oppenhmr Discovery
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Oppenhmr Discovery 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 Oppenhmr Discovery 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 Oppenhmr Discovery Mid, you can compare the effects of market volatilities on Auer Growth and Oppenhmr Discovery 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 Oppenhmr Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Oppenhmr Discovery.
Diversification Opportunities for Auer Growth and Oppenhmr Discovery
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Oppenhmr is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Oppenhmr Discovery Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenhmr Discovery Mid 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 Oppenhmr Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenhmr Discovery Mid has no effect on the direction of Auer Growth i.e., Auer Growth and Oppenhmr Discovery go up and down completely randomly.
Pair Corralation between Auer Growth and Oppenhmr Discovery
Assuming the 90 days horizon Auer Growth is expected to generate 2.23 times less return on investment than Oppenhmr Discovery. But when comparing it to its historical volatility, Auer Growth Fund is 1.3 times less risky than Oppenhmr Discovery. It trades about 0.18 of its potential returns per unit of risk. Oppenhmr Discovery Mid is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,426 in Oppenhmr Discovery Mid on August 31, 2024 and sell it today you would earn a total of 310.00 from holding Oppenhmr Discovery Mid or generate 9.05% 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. Oppenhmr Discovery Mid
Performance |
| Timeline |
| Auer Growth Fund |
| Oppenhmr Discovery Mid |
Auer Growth and Oppenhmr Discovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Oppenhmr Discovery
The main advantage of trading using opposite Auer Growth and Oppenhmr Discovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Oppenhmr Discovery 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 Oppenhmr Discovery will offset losses from the drop in Oppenhmr Discovery'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 |
| Oppenhmr Discovery vs. Qs Growth Fund | Oppenhmr Discovery vs. Growth Opportunities Fund | Oppenhmr Discovery vs. Commonwealth Global Fund | Oppenhmr Discovery 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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