Correlation Between Cutler Equity and Scharf Fund
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and Scharf Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Scharf Fund Retail, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Scharf Fund.
Diversification Opportunities for Cutler Equity and Scharf Fund
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cutler and Scharf is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity 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 Cutler Equity 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 Cutler Equity 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 Cutler Equity i.e., Cutler Equity and Scharf Fund go up and down completely randomly.
Pair Corralation between Cutler Equity and Scharf Fund
Assuming the 90 days horizon Cutler Equity is expected to generate 1.78 times less return on investment than Scharf Fund. In addition to that, Cutler Equity is 1.12 times more volatile than Scharf Fund Retail. It trades about 0.13 of its total potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.26 per unit of volatility. If you would invest 5,518 in Scharf Fund Retail on August 29, 2024 and sell it today you would earn a total of 227.00 from holding Scharf Fund Retail or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Scharf Fund Retail
Performance |
| Timeline |
| Cutler Equity |
| Scharf Fund Retail |
Cutler Equity and Scharf Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Scharf Fund
The main advantage of trading using opposite Cutler Equity and Scharf Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Small Cap Stock | Cutler Equity vs. Archer Balanced Fund | Cutler Equity vs. Eic Value Fund | Cutler Equity vs. Qs Global Equity |
| Scharf Fund vs. Scharf Global Opportunity | Scharf Fund vs. Scharf Balanced Opportunity | Scharf Fund vs. Scharf Balanced Opportunity | Scharf Fund vs. Eventide Gilead 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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