Correlation Between Eic Value and Great West
Can any of the company-specific risk be diversified away by investing in both Eic Value and Great West 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 Great West 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 Great West E Strategies, you can compare the effects of market volatilities on Eic Value and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Great West.
Diversification Opportunities for Eic Value and Great West
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eic and Great is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Great West E Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West E 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West E has no effect on the direction of Eic Value i.e., Eic Value and Great West go up and down completely randomly.
Pair Corralation between Eic Value and Great West
Assuming the 90 days horizon Eic Value is expected to generate 1.82 times less return on investment than Great West. But when comparing it to its historical volatility, Eic Value Fund is 1.12 times less risky than Great West. It trades about 0.06 of its potential returns per unit of risk. Great West E Strategies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,064 in Great West E Strategies on October 9, 2024 and sell it today you would earn a total of 504.00 from holding Great West E Strategies or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Great West E Strategies
Performance |
| Timeline |
| Eic Value Fund |
| Great West E |
Eic Value and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Great West
The main advantage of trading using opposite Eic Value and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Eic Value vs. Short Precious Metals | Eic Value vs. Gamco Global Gold | Eic Value vs. Europac Gold Fund | Eic Value vs. Invesco Gold Special |
| Great West vs. Tax Managed Large Cap | Great West vs. M Large Cap | Great West vs. Americafirst Large Cap | Great West vs. Qs Large Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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