Correlation Between Growth Fund and Aston Montag
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Aston Montag 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 Growth Fund and Aston Montag into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Aston Montag Caldwell, you can compare the effects of market volatilities on Growth Fund and Aston Montag 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 Growth Fund with a short position of Aston Montag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Aston Montag.
Diversification Opportunities for Growth Fund and Aston Montag
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Growth and Aston is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Aston Montag Caldwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Montag Caldwell and Growth 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 Growth Fund Of are associated (or correlated) with Aston Montag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Montag Caldwell has no effect on the direction of Growth Fund i.e., Growth Fund and Aston Montag go up and down completely randomly.
Pair Corralation between Growth Fund and Aston Montag
Assuming the 90 days horizon Growth Fund Of is expected to under-perform the Aston Montag. In addition to that, Growth Fund is 1.08 times more volatile than Aston Montag Caldwell. It trades about -0.07 of its total potential returns per unit of risk. Aston Montag Caldwell is currently generating about -0.01 per unit of volatility. If you would invest 1,240 in Aston Montag Caldwell on November 27, 2024 and sell it today you would lose (2.00) from holding Aston Montag Caldwell or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Aston Montag Caldwell
Performance |
| Timeline |
| Growth Fund |
| Aston Montag Caldwell |
Growth Fund and Aston Montag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Aston Montag
The main advantage of trading using opposite Growth Fund and Aston Montag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Aston Montag 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 Aston Montag will offset losses from the drop in Aston Montag's long position.| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. American Funds Fundamental | Growth Fund vs. Washington Mutual Investors |
| Aston Montag vs. Credit Suisse Modity | Aston Montag vs. Selected American Shares | Aston Montag vs. Causeway International Value | Aston Montag vs. Marsico Focus Fund |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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