Correlation Between Capital World and Eic Value
Can any of the company-specific risk be diversified away by investing in both Capital World and Eic Value 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 Capital World and Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Eic Value Fund, you can compare the effects of market volatilities on Capital World and Eic Value 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 Capital World with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Eic Value.
Diversification Opportunities for Capital World and Eic Value
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capital and Eic is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Capital World 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 Capital World Bond are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Capital World i.e., Capital World and Eic Value go up and down completely randomly.
Pair Corralation between Capital World and Eic Value
Assuming the 90 days horizon Capital World is expected to generate 7.06 times less return on investment than Eic Value. But when comparing it to its historical volatility, Capital World Bond is 1.69 times less risky than Eic Value. It trades about 0.02 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,436 in Eic Value Fund on September 12, 2024 and sell it today you would earn a total of 289.00 from holding Eic Value Fund or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Capital World Bond vs. Eic Value Fund
Performance |
| Timeline |
| Capital World Bond |
| Eic Value Fund |
Capital World and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Eic Value
The main advantage of trading using opposite Capital World and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.| Capital World vs. Rbc Emerging Markets | Capital World vs. Kinetics Market Opportunities | Capital World vs. Calvert Developed Market | Capital World vs. Artisan Emerging Markets |
| Eic Value vs. Fidelity Advisor Diversified | Eic Value vs. Oppenheimer International Diversified | Eic Value vs. Blackrock Sm Cap | Eic Value vs. Delaware Limited Term Diversified |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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