Correlation Between Bruce Fund and Berwyn Income
Can any of the company-specific risk be diversified away by investing in both Bruce Fund and Berwyn Income 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 Bruce Fund and Berwyn Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bruce Fund Bruce and Berwyn Income Fund, you can compare the effects of market volatilities on Bruce Fund and Berwyn Income 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 Bruce Fund with a short position of Berwyn Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bruce Fund and Berwyn Income.
Diversification Opportunities for Bruce Fund and Berwyn Income
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bruce and Berwyn is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bruce Fund Bruce and Berwyn Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berwyn Income and Bruce Fund 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 Bruce Fund Bruce are associated (or correlated) with Berwyn Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berwyn Income has no effect on the direction of Bruce Fund i.e., Bruce Fund and Berwyn Income go up and down completely randomly.
Pair Corralation between Bruce Fund and Berwyn Income
Assuming the 90 days horizon Bruce Fund Bruce is expected to generate 1.88 times more return on investment than Berwyn Income. However, Bruce Fund is 1.88 times more volatile than Berwyn Income Fund. It trades about 0.1 of its potential returns per unit of risk. Berwyn Income Fund is currently generating about 0.15 per unit of risk. If you would invest 51,225 in Bruce Fund Bruce on September 1, 2024 and sell it today you would earn a total of 3,210 from holding Bruce Fund Bruce or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bruce Fund Bruce vs. Berwyn Income Fund
Performance |
| Timeline |
| Bruce Fund Bruce |
| Berwyn Income |
Bruce Fund and Berwyn Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bruce Fund and Berwyn Income
The main advantage of trading using opposite Bruce Fund and Berwyn Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bruce Fund position performs unexpectedly, Berwyn Income 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 Berwyn Income will offset losses from the drop in Berwyn Income's long position.| Bruce Fund vs. Quantitative Longshort Equity | Bruce Fund vs. Barings Active Short | Bruce Fund vs. Ultra Short Fixed Income | Bruce Fund vs. Aqr Sustainable Long Short |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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