Correlation Between Auer Growth and International Emerging
Can any of the company-specific risk be diversified away by investing in both Auer Growth and International Emerging 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 International Emerging 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 International Emerging Markets, you can compare the effects of market volatilities on Auer Growth and International Emerging 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 International Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and International Emerging.
Diversification Opportunities for Auer Growth and International Emerging
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Auer and International is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and International Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Emerging 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 International Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Emerging has no effect on the direction of Auer Growth i.e., Auer Growth and International Emerging go up and down completely randomly.
Pair Corralation between Auer Growth and International Emerging
Assuming the 90 days horizon Auer Growth Fund is expected to under-perform the International Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Auer Growth Fund is 1.03 times less risky than International Emerging. The mutual fund trades about -0.14 of its potential returns per unit of risk. The International Emerging Markets is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,651 in International Emerging Markets on November 29, 2024 and sell it today you would earn a total of 66.00 from holding International Emerging Markets or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Auer Growth Fund vs. International Emerging Markets
Performance |
| Timeline |
| Auer Growth Fund |
| International Emerging |
Auer Growth and International Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and International Emerging
The main advantage of trading using opposite Auer Growth and International Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, International Emerging 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 International Emerging will offset losses from the drop in International Emerging'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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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