Correlation Between Frontier Mfg and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Frontier Mfg and Equity 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 Frontier Mfg and Equity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Mfg Global and Equity Growth Fund, you can compare the effects of market volatilities on Frontier Mfg and Equity 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 Frontier Mfg with a short position of Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Mfg and Equity Growth.
Diversification Opportunities for Frontier Mfg and Equity Growth
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Frontier and Equity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Mfg Global and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth and Frontier Mfg 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 Frontier Mfg Global are associated (or correlated) with Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Frontier Mfg i.e., Frontier Mfg and Equity Growth go up and down completely randomly.
Pair Corralation between Frontier Mfg and Equity Growth
Assuming the 90 days horizon Frontier Mfg is expected to generate 1.62 times less return on investment than Equity Growth. But when comparing it to its historical volatility, Frontier Mfg Global is 1.49 times less risky than Equity Growth. It trades about 0.12 of its potential returns per unit of risk. Equity Growth Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,001 in Equity Growth Fund on September 1, 2024 and sell it today you would earn a total of 435.00 from holding Equity Growth Fund or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Frontier Mfg Global vs. Equity Growth Fund
Performance |
| Timeline |
| Frontier Mfg Global |
| Equity Growth |
Frontier Mfg and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Mfg and Equity Growth
The main advantage of trading using opposite Frontier Mfg and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Mfg position performs unexpectedly, Equity 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Frontier Mfg vs. Calvert Conservative Allocation | Frontier Mfg vs. Blackrock Conservative Prprdptfinstttnl | Frontier Mfg vs. Oppenheimer International Diversified | Frontier Mfg vs. Adams Diversified Equity |
| Equity Growth vs. Oklahoma College Savings | Equity Growth vs. Ab Bond Inflation | Equity Growth vs. Cref Inflation Linked Bond | Equity Growth vs. Ab Bond Inflation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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