Correlation Between Causeway International and Miller Opportunity
Can any of the company-specific risk be diversified away by investing in both Causeway International and Miller Opportunity 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 Causeway International and Miller Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Causeway International Value and Miller Opportunity Trust, you can compare the effects of market volatilities on Causeway International and Miller Opportunity 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 Causeway International with a short position of Miller Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway International and Miller Opportunity.
Diversification Opportunities for Causeway International and Miller Opportunity
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Causeway and Miller is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Causeway International Value and Miller Opportunity Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Opportunity Trust and Causeway International 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 Causeway International Value are associated (or correlated) with Miller Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Opportunity Trust has no effect on the direction of Causeway International i.e., Causeway International and Miller Opportunity go up and down completely randomly.
Pair Corralation between Causeway International and Miller Opportunity
Assuming the 90 days horizon Causeway International Value is expected to generate 0.64 times more return on investment than Miller Opportunity. However, Causeway International Value is 1.57 times less risky than Miller Opportunity. It trades about -0.14 of its potential returns per unit of risk. Miller Opportunity Trust is currently generating about -0.15 per unit of risk. If you would invest 2,140 in Causeway International Value on January 18, 2025 and sell it today you would lose (179.00) from holding Causeway International Value or give up 8.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Causeway International Value vs. Miller Opportunity Trust
Performance |
| Timeline |
| Causeway International |
| Miller Opportunity Trust |
Causeway International and Miller Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Causeway International and Miller Opportunity
The main advantage of trading using opposite Causeway International and Miller Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway International position performs unexpectedly, Miller Opportunity 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 Miller Opportunity will offset losses from the drop in Miller Opportunity's long position.| Causeway International vs. Emerging Markets Fund | Causeway International vs. Sustainable Equity Fund | Causeway International vs. Disciplined Growth Fund | Causeway International vs. Small Cap Growth |
| Miller Opportunity vs. T Rowe Price | Miller Opportunity vs. Dunham Large Cap | Miller Opportunity vs. Guidemark Large Cap | Miller Opportunity vs. Transamerica Large Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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