Correlation Between Eic Value and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Eic Value and Growth Allocation 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 Eic Value and Growth Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Growth Allocation Index, you can compare the effects of market volatilities on Eic Value and Growth Allocation 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 Eic Value with a short position of Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Growth Allocation.
Diversification Opportunities for Eic Value and Growth Allocation
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eic and Growth is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Growth Allocation Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation Index and Eic Value 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 Eic Value Fund are associated (or correlated) with Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation Index has no effect on the direction of Eic Value i.e., Eic Value and Growth Allocation go up and down completely randomly.
Pair Corralation between Eic Value and Growth Allocation
Assuming the 90 days horizon Eic Value is expected to generate 1.03 times less return on investment than Growth Allocation. In addition to that, Eic Value is 1.28 times more volatile than Growth Allocation Index. It trades about 0.08 of its total potential returns per unit of risk. Growth Allocation Index is currently generating about 0.1 per unit of volatility. If you would invest 856.00 in Growth Allocation Index on September 2, 2024 and sell it today you would earn a total of 280.00 from holding Growth Allocation Index or generate 32.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Growth Allocation Index
Performance |
| Timeline |
| Eic Value Fund |
| Growth Allocation Index |
Eic Value and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Growth Allocation
The main advantage of trading using opposite Eic Value and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Eic Value vs. Alliancebernstein National Municipal | Eic Value vs. Pace Municipal Fixed | Eic Value vs. The National Tax Free | Eic Value vs. Bbh Intermediate Municipal |
| Growth Allocation vs. Commonwealth Global Fund | Growth Allocation vs. Ab Value Fund | Growth Allocation vs. T Rowe Price | Growth Allocation vs. Shelton Funds |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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