Correlation Between Europacific Growth and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Europacific Growth 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 Europacific Growth and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Growth Fund Of, you can compare the effects of market volatilities on Europacific Growth 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 Europacific Growth with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Growth Fund.
Diversification Opportunities for Europacific Growth and Growth Fund
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Europacific and Growth is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Europacific Growth 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 Europacific Growth Fund 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 Europacific Growth i.e., Europacific Growth and Growth Fund go up and down completely randomly.
Pair Corralation between Europacific Growth and Growth Fund
Assuming the 90 days horizon Europacific Growth is expected to generate 3.0 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Europacific Growth Fund is 1.17 times less risky than Growth Fund. It trades about 0.05 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,577 in Growth Fund Of on September 12, 2024 and sell it today you would earn a total of 3,813 from holding Growth Fund Of or generate 83.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Growth Fund Of
Performance |
| Timeline |
| Europacific Growth |
| Growth Fund |
Europacific Growth and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Growth Fund
The main advantage of trading using opposite Europacific Growth and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth 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.| Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. SCOR PK | Europacific Growth vs. Morningstar Unconstrained Allocation | Europacific Growth vs. Thrivent High Yield |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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