Correlation Between Growth Fund and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Manning Napier 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 Manning Napier 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 Manning Napier Equity, you can compare the effects of market volatilities on Growth Fund and Manning Napier 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 Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Manning Napier.
Diversification Opportunities for Growth Fund and Manning Napier
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and Manning is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Manning Napier Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Equity 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Equity has no effect on the direction of Growth Fund i.e., Growth Fund and Manning Napier go up and down completely randomly.
Pair Corralation between Growth Fund and Manning Napier
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.39 times more return on investment than Manning Napier. However, Growth Fund is 1.39 times more volatile than Manning Napier Equity. It trades about 0.1 of its potential returns per unit of risk. Manning Napier Equity is currently generating about 0.11 per unit of risk. If you would invest 5,850 in Growth Fund Of on September 2, 2024 and sell it today you would earn a total of 2,326 from holding Growth Fund Of or generate 39.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Manning Napier Equity
Performance |
| Timeline |
| Growth Fund |
| Manning Napier Equity |
Growth Fund and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Manning Napier
The main advantage of trading using opposite Growth Fund and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier'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 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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