Correlation Between Chase Growth and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Chase Growth and Aggressive Growth 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 Chase Growth and Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chase Growth Fund and Aggressive Growth Fund, you can compare the effects of market volatilities on Chase Growth and Aggressive Growth 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 Chase Growth with a short position of Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and Aggressive Growth.
Diversification Opportunities for Chase Growth and Aggressive Growth
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chase and Aggressive is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and Aggressive Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Chase 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 Chase Growth Fund are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Chase Growth i.e., Chase Growth and Aggressive Growth go up and down completely randomly.
Pair Corralation between Chase Growth and Aggressive Growth
Assuming the 90 days horizon Chase Growth Fund is expected to generate 0.8 times more return on investment than Aggressive Growth. However, Chase Growth Fund is 1.26 times less risky than Aggressive Growth. It trades about 0.25 of its potential returns per unit of risk. Aggressive Growth Fund is currently generating about 0.17 per unit of risk. If you would invest 1,564 in Chase Growth Fund on September 12, 2024 and sell it today you would earn a total of 204.00 from holding Chase Growth Fund or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chase Growth Fund vs. Aggressive Growth Fund
Performance |
| Timeline |
| Chase Growth |
| Aggressive Growth |
Chase Growth and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chase Growth and Aggressive Growth
The main advantage of trading using opposite Chase Growth and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase Growth position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| Chase Growth vs. The Chesapeake Growth | Chase Growth vs. Aston Montag Caldwell | Chase Growth vs. The Jensen Portfolio | Chase Growth vs. Cambiar Opportunity Fund |
| Aggressive Growth vs. Western Asset High | Aggressive Growth vs. Fa 529 Aggressive | Aggressive Growth vs. Metropolitan West High | Aggressive Growth vs. Siit High Yield |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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