Correlation Between Europac Gold and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Europac Gold and Frost Kempner 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 Europac Gold and Frost Kempner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and Frost Kempner Multi Cap, you can compare the effects of market volatilities on Europac Gold and Frost Kempner 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 Europac Gold with a short position of Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Frost Kempner.
Diversification Opportunities for Europac Gold and Frost Kempner
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Europac and Frost is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Frost Kempner Multi Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Multi and Europac Gold 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 Europac Gold Fund are associated (or correlated) with Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Multi has no effect on the direction of Europac Gold i.e., Europac Gold and Frost Kempner go up and down completely randomly.
Pair Corralation between Europac Gold and Frost Kempner
Assuming the 90 days horizon Europac Gold Fund is expected to under-perform the Frost Kempner. In addition to that, Europac Gold is 6.0 times more volatile than Frost Kempner Multi Cap. It trades about -0.05 of its total potential returns per unit of risk. Frost Kempner Multi Cap is currently generating about -0.05 per unit of volatility. If you would invest 1,261 in Frost Kempner Multi Cap on September 13, 2024 and sell it today you would lose (6.00) from holding Frost Kempner Multi Cap or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europac Gold Fund vs. Frost Kempner Multi Cap
Performance |
| Timeline |
| Europac Gold |
| Frost Kempner Multi |
Europac Gold and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac Gold and Frost Kempner
The main advantage of trading using opposite Europac Gold and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
| Frost Kempner vs. Frost Growth Equity | Frost Kempner vs. Frost Low Duration | Frost Kempner vs. Frost Total Return | Frost Kempner vs. Frost Kempner Treasury |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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