Correlation Between Auer Growth and Transamerica High
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Transamerica High 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 Transamerica High 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 Transamerica High Yield, you can compare the effects of market volatilities on Auer Growth and Transamerica High 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 Transamerica High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Transamerica High.
Diversification Opportunities for Auer Growth and Transamerica High
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auer and Transamerica is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Transamerica High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica High Yield 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 Transamerica High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica High Yield has no effect on the direction of Auer Growth i.e., Auer Growth and Transamerica High go up and down completely randomly.
Pair Corralation between Auer Growth and Transamerica High
Assuming the 90 days horizon Auer Growth Fund is expected to generate 3.78 times more return on investment than Transamerica High. However, Auer Growth is 3.78 times more volatile than Transamerica High Yield. It trades about 0.08 of its potential returns per unit of risk. Transamerica High Yield is currently generating about 0.17 per unit of risk. If you would invest 1,587 in Auer Growth Fund on September 3, 2024 and sell it today you would earn a total of 181.00 from holding Auer Growth Fund or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Transamerica High Yield
Performance |
| Timeline |
| Auer Growth Fund |
| Transamerica High Yield |
Auer Growth and Transamerica High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Transamerica High
The main advantage of trading using opposite Auer Growth and Transamerica High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Transamerica High 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 Transamerica High will offset losses from the drop in Transamerica High'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 |
| Transamerica High vs. Columbia Small Cap | Transamerica High vs. Lord Abbett Small | Transamerica High vs. Amg River Road | Transamerica High vs. American Century Etf |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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