Correlation Between At Equity and Balanced Fund
Can any of the company-specific risk be diversified away by investing in both At Equity and Balanced Fund 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 At Equity and Balanced Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between At Equity Income and Balanced Fund Retail, you can compare the effects of market volatilities on At Equity and Balanced Fund 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 At Equity with a short position of Balanced Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of At Equity and Balanced Fund.
Diversification Opportunities for At Equity and Balanced Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AWYIX and Balanced is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding At Equity Income and Balanced Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Retail and At Equity 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 At Equity Income are associated (or correlated) with Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Retail has no effect on the direction of At Equity i.e., At Equity and Balanced Fund go up and down completely randomly.
Pair Corralation between At Equity and Balanced Fund
Assuming the 90 days horizon At Equity Income is expected to generate 1.17 times more return on investment than Balanced Fund. However, At Equity is 1.17 times more volatile than Balanced Fund Retail. It trades about 0.13 of its potential returns per unit of risk. Balanced Fund Retail is currently generating about 0.08 per unit of risk. If you would invest 5,804 in At Equity Income on September 13, 2024 and sell it today you would earn a total of 693.00 from holding At Equity Income or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
At Equity Income vs. Balanced Fund Retail
Performance |
| Timeline |
| At Equity Income |
| Balanced Fund Retail |
At Equity and Balanced Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with At Equity and Balanced Fund
The main advantage of trading using opposite At Equity and Balanced Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if At Equity position performs unexpectedly, Balanced Fund 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 Balanced Fund will offset losses from the drop in Balanced Fund's long position.| At Equity vs. Invesco Disciplined Equity | At Equity vs. Cibc Atlas All | At Equity vs. At Income Opportunities | At Equity vs. At Mid Cap |
| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex Fund Retail |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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