Correlation Between Eic Value and Transamerica Asset
Can any of the company-specific risk be diversified away by investing in both Eic Value and Transamerica Asset 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 Transamerica Asset 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 Transamerica Asset Allocation, you can compare the effects of market volatilities on Eic Value and Transamerica Asset 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 Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Transamerica Asset.
Diversification Opportunities for Eic Value and Transamerica Asset
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eic and Transamerica is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset 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 Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Eic Value i.e., Eic Value and Transamerica Asset go up and down completely randomly.
Pair Corralation between Eic Value and Transamerica Asset
Assuming the 90 days horizon Eic Value is expected to generate 8.36 times less return on investment than Transamerica Asset. In addition to that, Eic Value is 1.34 times more volatile than Transamerica Asset Allocation. It trades about 0.02 of its total potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.21 per unit of volatility. If you would invest 1,380 in Transamerica Asset Allocation on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Transamerica Asset Allocation or generate 1.67% 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. Transamerica Asset Allocation
Performance |
| Timeline |
| Eic Value Fund |
| Transamerica Asset |
Eic Value and Transamerica Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Transamerica Asset
The main advantage of trading using opposite Eic Value and Transamerica Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Transamerica Asset 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 Transamerica Asset will offset losses from the drop in Transamerica Asset's long position.| Eic Value vs. Aqr Long Short Equity | Eic Value vs. Franklin Federal Limited Term | Eic Value vs. Lord Abbett Short | Eic Value vs. Siit Ultra Short |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |