Correlation Between Bright Rock and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Bright Rock and Growth 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 Bright Rock and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Rock Mid and Growth Fund Of, you can compare the effects of market volatilities on Bright Rock and Growth 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 Bright Rock with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Rock and Growth Fund.
Diversification Opportunities for Bright Rock and Growth Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bright and Growth is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bright Rock Mid and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Bright Rock 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 Bright Rock Mid are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Bright Rock i.e., Bright Rock and Growth Fund go up and down completely randomly.
Pair Corralation between Bright Rock and Growth Fund
Assuming the 90 days horizon Bright Rock Mid is expected to generate 0.98 times more return on investment than Growth Fund. However, Bright Rock Mid is 1.02 times less risky than Growth Fund. It trades about 0.37 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.37 per unit of risk. If you would invest 2,574 in Bright Rock Mid on September 1, 2024 and sell it today you would earn a total of 182.00 from holding Bright Rock Mid or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bright Rock Mid vs. Growth Fund Of
Performance |
| Timeline |
| Bright Rock Mid |
| Growth Fund |
Bright Rock and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Rock and Growth Fund
The main advantage of trading using opposite Bright Rock and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Rock position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Bright Rock vs. Quantitative Longshort Equity | Bright Rock vs. Old Westbury Short Term | Bright Rock vs. Franklin Federal Limited Term | Bright Rock vs. Aqr Sustainable Long Short |
| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Washington Mutual Investors | Growth Fund vs. Capital World Growth | Growth Fund vs. American Balanced Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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