Correlation Between Clipper Fund and Ariel Fund
Can any of the company-specific risk be diversified away by investing in both Clipper Fund and Ariel 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 Clipper Fund and Ariel Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipper Fund Inc and Ariel Fund Investor, you can compare the effects of market volatilities on Clipper Fund and Ariel 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 Clipper Fund with a short position of Ariel Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipper Fund and Ariel Fund.
Diversification Opportunities for Clipper Fund and Ariel Fund
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clipper and Ariel is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Fund Inc and Ariel Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariel Fund Investor and Clipper 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 Clipper Fund Inc are associated (or correlated) with Ariel Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariel Fund Investor has no effect on the direction of Clipper Fund i.e., Clipper Fund and Ariel Fund go up and down completely randomly.
Pair Corralation between Clipper Fund and Ariel Fund
Assuming the 90 days horizon Clipper Fund Inc is expected to generate 0.79 times more return on investment than Ariel Fund. However, Clipper Fund Inc is 1.26 times less risky than Ariel Fund. It trades about 0.07 of its potential returns per unit of risk. Ariel Fund Investor is currently generating about 0.03 per unit of risk. If you would invest 10,835 in Clipper Fund Inc on November 27, 2024 and sell it today you would earn a total of 3,691 from holding Clipper Fund Inc or generate 34.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipper Fund Inc vs. Ariel Fund Investor
Performance |
| Timeline |
| Clipper Fund |
| Ariel Fund Investor |
Clipper Fund and Ariel Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipper Fund and Ariel Fund
The main advantage of trading using opposite Clipper Fund and Ariel Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipper Fund position performs unexpectedly, Ariel 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 Ariel Fund will offset losses from the drop in Ariel Fund's long position.| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
| Ariel Fund vs. Ariel Appreciation Fund | Ariel Fund vs. Clipper Fund Inc | Ariel Fund vs. Baron Growth Fund | Ariel Fund vs. Blackrock Value Opps |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |