Correlation Between Continental Small and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Continental Small and Commodities Strategy 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 Continental Small and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Small Pany and Commodities Strategy Fund, you can compare the effects of market volatilities on Continental Small and Commodities Strategy 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 Continental Small with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Small and Commodities Strategy.
Diversification Opportunities for Continental Small and Commodities Strategy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Continental and Commodities is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Continental Small Pany and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and Continental Small 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 Continental Small Pany are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Continental Small i.e., Continental Small and Commodities Strategy go up and down completely randomly.
Pair Corralation between Continental Small and Commodities Strategy
Assuming the 90 days horizon Continental Small Pany is expected to under-perform the Commodities Strategy. In addition to that, Continental Small is 1.01 times more volatile than Commodities Strategy Fund. It trades about -0.04 of its total potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.1 per unit of volatility. If you would invest 2,894 in Commodities Strategy Fund on September 12, 2024 and sell it today you would earn a total of 44.00 from holding Commodities Strategy Fund or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Continental Small Pany vs. Commodities Strategy Fund
Performance |
| Timeline |
| Continental Small Pany |
| Commodities Strategy |
Continental Small and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Small and Commodities Strategy
The main advantage of trading using opposite Continental Small and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Small position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Continental Small vs. Oklahoma Municipal Fund | Continental Small vs. Franklin High Yield | Continental Small vs. T Rowe Price | Continental Small vs. Pace Municipal Fixed |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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