Correlation Between Growth Fund and The Chesapeake
Can any of the company-specific risk be diversified away by investing in both Growth Fund and The Chesapeake 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 Growth Fund and The Chesapeake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and The Chesapeake Growth, you can compare the effects of market volatilities on Growth Fund and The Chesapeake 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 Growth Fund with a short position of The Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and The Chesapeake.
Diversification Opportunities for Growth Fund and The Chesapeake
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and The is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Growth and Growth 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 Growth Fund Of are associated (or correlated) with The Chesapeake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Growth has no effect on the direction of Growth Fund i.e., Growth Fund and The Chesapeake go up and down completely randomly.
Pair Corralation between Growth Fund and The Chesapeake
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.25 times more return on investment than The Chesapeake. However, Growth Fund is 1.25 times more volatile than The Chesapeake Growth. It trades about 0.09 of its potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.07 per unit of risk. If you would invest 5,207 in Growth Fund Of on August 26, 2024 and sell it today you would earn a total of 2,673 from holding Growth Fund Of or generate 51.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. The Chesapeake Growth
Performance |
| Timeline |
| Growth Fund |
| Chesapeake Growth |
Growth Fund and The Chesapeake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and The Chesapeake
The main advantage of trading using opposite Growth Fund and The Chesapeake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, The Chesapeake 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 The Chesapeake will offset losses from the drop in The Chesapeake's long position.| Growth Fund vs. Income Fund Of | Growth Fund vs. New World Fund | Growth Fund vs. American Mutual Fund | Growth Fund vs. American Mutual Fund |
| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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