Correlation Between Pro-blend(r) Moderate and Foreign Value
Can any of the company-specific risk be diversified away by investing in both Pro-blend(r) Moderate and Foreign Value 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 Pro-blend(r) Moderate and Foreign Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Moderate Term and Foreign Value Fund, you can compare the effects of market volatilities on Pro-blend(r) Moderate and Foreign Value 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 Pro-blend(r) Moderate with a short position of Foreign Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro-blend(r) Moderate and Foreign Value.
Diversification Opportunities for Pro-blend(r) Moderate and Foreign Value
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pro-blend(r) and Foreign is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Foreign Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Value and Pro-blend(r) Moderate 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 Pro Blend Moderate Term are associated (or correlated) with Foreign Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Value has no effect on the direction of Pro-blend(r) Moderate i.e., Pro-blend(r) Moderate and Foreign Value go up and down completely randomly.
Pair Corralation between Pro-blend(r) Moderate and Foreign Value
Assuming the 90 days horizon Pro Blend Moderate Term is expected to generate 0.47 times more return on investment than Foreign Value. However, Pro Blend Moderate Term is 2.15 times less risky than Foreign Value. It trades about 0.23 of its potential returns per unit of risk. Foreign Value Fund is currently generating about 0.05 per unit of risk. If you would invest 1,470 in Pro Blend Moderate Term on September 2, 2024 and sell it today you would earn a total of 26.00 from holding Pro Blend Moderate Term or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Moderate Term vs. Foreign Value Fund
Performance |
| Timeline |
| Pro-blend(r) Moderate |
| Foreign Value |
Pro-blend(r) Moderate and Foreign Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro-blend(r) Moderate and Foreign Value
The main advantage of trading using opposite Pro-blend(r) Moderate and Foreign Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro-blend(r) Moderate position performs unexpectedly, Foreign Value 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 Foreign Value will offset losses from the drop in Foreign Value's long position.| Pro-blend(r) Moderate vs. Pro Blend Servative Term | Pro-blend(r) Moderate vs. Pro Blend Extended Term | Pro-blend(r) Moderate vs. Pro Blend Maximum Term | Pro-blend(r) Moderate vs. Greenspring Fund Retail |
| Foreign Value vs. Mid Cap Index | Foreign Value vs. Mid Cap Strategic | Foreign Value vs. Valic Company I | Foreign Value vs. Valic Company I |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stocks Directory Find actively traded stocks across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |