Correlation Between Bull Profund and Small Cap
Can any of the company-specific risk be diversified away by investing in both Bull Profund and Small 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 Bull Profund and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bull Profund Investor and Small Cap Profund Small Cap, you can compare the effects of market volatilities on Bull Profund and Small 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 Bull Profund with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bull Profund and Small Cap.
Diversification Opportunities for Bull Profund and Small Cap
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bull and Small is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bull Profund Investor and Small Cap Profund Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Profund and Bull Profund 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 Bull Profund Investor are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Profund has no effect on the direction of Bull Profund i.e., Bull Profund and Small Cap go up and down completely randomly.
Pair Corralation between Bull Profund and Small Cap
Assuming the 90 days horizon Bull Profund is expected to generate 1.4 times less return on investment than Small Cap. But when comparing it to its historical volatility, Bull Profund Investor is 1.03 times less risky than Small Cap. It trades about 0.09 of its potential returns per unit of risk. Small Cap Profund Small Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11,379 in Small Cap Profund Small Cap on October 20, 2024 and sell it today you would earn a total of 263.00 from holding Small Cap Profund Small Cap or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bull Profund Investor vs. Small Cap Profund Small Cap
Performance |
| Timeline |
| Bull Profund Investor |
| Small Cap Profund |
Bull Profund and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bull Profund and Small Cap
The main advantage of trading using opposite Bull Profund and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bull Profund position performs unexpectedly, Small 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 Small Cap will offset losses from the drop in Small Cap's long position.| Bull Profund vs. Blackrock Health Sciences | Bull Profund vs. Baron Health Care | Bull Profund vs. Baillie Gifford Health | Bull Profund vs. Invesco Global Health |
| Small Cap vs. Touchstone Large Cap | Small Cap vs. Fisher Large Cap | Small Cap vs. Vest Large Cap | Small Cap vs. Calvert Large 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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