Correlation Between Us Government and Scharf Fund
Can any of the company-specific risk be diversified away by investing in both Us Government and Scharf 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 Us Government and Scharf Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Scharf Fund Retail, you can compare the effects of market volatilities on Us Government and Scharf 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 Us Government with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Scharf Fund.
Diversification Opportunities for Us Government and Scharf Fund
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CGTAX and Scharf is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Scharf Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Fund Retail and Us Government 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 Us Government Securities are associated (or correlated) with Scharf Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Fund Retail has no effect on the direction of Us Government i.e., Us Government and Scharf Fund go up and down completely randomly.
Pair Corralation between Us Government and Scharf Fund
Assuming the 90 days horizon Us Government is expected to generate 5.66 times less return on investment than Scharf Fund. But when comparing it to its historical volatility, Us Government Securities is 1.7 times less risky than Scharf Fund. It trades about 0.01 of its potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,963 in Scharf Fund Retail on August 25, 2024 and sell it today you would earn a total of 716.00 from holding Scharf Fund Retail or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Us Government Securities vs. Scharf Fund Retail
Performance |
| Timeline |
| Us Government Securities |
| Scharf Fund Retail |
Us Government and Scharf Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Scharf Fund
The main advantage of trading using opposite Us Government and Scharf Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Scharf 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 Scharf Fund will offset losses from the drop in Scharf Fund's long position.| Us Government vs. Government Securities Fund | Us Government vs. John Hancock Government | Us Government vs. Short Term Government Fund | Us Government vs. Us Government Securities |
| Scharf Fund vs. Lord Abbett Government | Scharf Fund vs. Inverse Government Long | Scharf Fund vs. Us Government Securities | Scharf Fund vs. Short Term Government 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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