Correlation Between Auer Growth and Large Cap
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Large Cap 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 Large Cap 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 Large Cap Value, you can compare the effects of market volatilities on Auer Growth and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Large Cap.
Diversification Opportunities for Auer Growth and Large Cap
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Large is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Auer Growth i.e., Auer Growth and Large Cap go up and down completely randomly.
Pair Corralation between Auer Growth and Large Cap
Assuming the 90 days horizon Auer Growth is expected to generate 1.01 times less return on investment than Large Cap. In addition to that, Auer Growth is 1.13 times more volatile than Large Cap Value. It trades about 0.06 of its total potential returns per unit of risk. Large Cap Value is currently generating about 0.07 per unit of volatility. If you would invest 2,674 in Large Cap Value on September 3, 2024 and sell it today you would earn a total of 199.00 from holding Large Cap Value or generate 7.44% 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. Large Cap Value
Performance |
| Timeline |
| Auer Growth Fund |
| Large Cap Value |
Auer Growth and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Large Cap
The main advantage of trading using opposite Auer Growth and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap'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 |
| Large Cap vs. American Century Etf | Large Cap vs. Ultrasmall Cap Profund Ultrasmall Cap | Large Cap vs. Ultramid Cap Profund Ultramid Cap | Large Cap vs. Columbia Small Cap |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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