Correlation Between Parametric Commodity and Fundvantage Trust
Can any of the company-specific risk be diversified away by investing in both Parametric Commodity and Fundvantage Trust 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 Parametric Commodity and Fundvantage Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parametric Modity Strategy and Fundvantage Trust , you can compare the effects of market volatilities on Parametric Commodity and Fundvantage Trust 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 Parametric Commodity with a short position of Fundvantage Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parametric Commodity and Fundvantage Trust.
Diversification Opportunities for Parametric Commodity and Fundvantage Trust
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Parametric and Fundvantage is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Parametric Modity Strategy and Fundvantage Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundvantage Trust and Parametric Commodity 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 Parametric Modity Strategy are associated (or correlated) with Fundvantage Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundvantage Trust has no effect on the direction of Parametric Commodity i.e., Parametric Commodity and Fundvantage Trust go up and down completely randomly.
Pair Corralation between Parametric Commodity and Fundvantage Trust
Assuming the 90 days horizon Parametric Commodity is expected to generate 1.21 times less return on investment than Fundvantage Trust. In addition to that, Parametric Commodity is 2.69 times more volatile than Fundvantage Trust . It trades about 0.04 of its total potential returns per unit of risk. Fundvantage Trust is currently generating about 0.14 per unit of volatility. If you would invest 905.00 in Fundvantage Trust on August 28, 2024 and sell it today you would earn a total of 124.00 from holding Fundvantage Trust or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Parametric Modity Strategy vs. Fundvantage Trust
Performance |
| Timeline |
| Parametric Commodity |
| Fundvantage Trust |
Parametric Commodity and Fundvantage Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parametric Commodity and Fundvantage Trust
The main advantage of trading using opposite Parametric Commodity and Fundvantage Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parametric Commodity position performs unexpectedly, Fundvantage Trust 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 Fundvantage Trust will offset losses from the drop in Fundvantage Trust's long position.| Parametric Commodity vs. Clarion Partners Real | Parametric Commodity vs. Lazard Global Listed | Parametric Commodity vs. Blackrock Commodity Strategies | Parametric Commodity vs. Franklin High Yield |
| Fundvantage Trust vs. Polen Global Growth | Fundvantage Trust vs. Polen International Growth | Fundvantage Trust vs. Ddj Opportunistic High | Fundvantage Trust vs. Ddj Opportunistic High |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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