Correlation Between Spectrum Fund and Dynamic Growth
Can any of the company-specific risk be diversified away by investing in both Spectrum Fund and Dynamic Growth 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 Spectrum Fund and Dynamic Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Fund Retail and Dynamic Growth Fund, you can compare the effects of market volatilities on Spectrum Fund and Dynamic Growth 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 Spectrum Fund with a short position of Dynamic Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Fund and Dynamic Growth.
Diversification Opportunities for Spectrum Fund and Dynamic Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spectrum and Dynamic is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Fund Retail and Dynamic Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Growth and Spectrum Fund 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 Spectrum Fund Retail are associated (or correlated) with Dynamic Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Growth has no effect on the direction of Spectrum Fund i.e., Spectrum Fund and Dynamic Growth go up and down completely randomly.
Pair Corralation between Spectrum Fund and Dynamic Growth
Assuming the 90 days horizon Spectrum Fund Retail is expected to generate 0.76 times more return on investment than Dynamic Growth. However, Spectrum Fund Retail is 1.31 times less risky than Dynamic Growth. It trades about -0.04 of its potential returns per unit of risk. Dynamic Growth Fund is currently generating about -0.08 per unit of risk. If you would invest 1,463 in Spectrum Fund Retail on October 24, 2024 and sell it today you would lose (62.00) from holding Spectrum Fund Retail or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectrum Fund Retail vs. Dynamic Growth Fund
Performance |
| Timeline |
| Spectrum Fund Retail |
| Dynamic Growth |
Spectrum Fund and Dynamic Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectrum Fund and Dynamic Growth
The main advantage of trading using opposite Spectrum Fund and Dynamic Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Fund position performs unexpectedly, Dynamic Growth 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 Dynamic Growth will offset losses from the drop in Dynamic Growth's long position.| Spectrum Fund vs. Muirfield Fund Retail | Spectrum Fund vs. Dynamic Growth Fund | Spectrum Fund vs. Balanced Fund Retail | Spectrum Fund vs. Quantex Fund Retail |
| Dynamic Growth vs. Muirfield Fund Retail | Dynamic Growth vs. Quantex Fund Retail | Dynamic Growth vs. Balanced Fund Retail | Dynamic Growth vs. Infrastructure Fund Retail |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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