Correlation Between General Money and Transamerica Funds
Can any of the company-specific risk be diversified away by investing in both General Money and Transamerica Funds 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 General Money and Transamerica Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Transamerica Funds , you can compare the effects of market volatilities on General Money and Transamerica Funds 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 General Money with a short position of Transamerica Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Transamerica Funds.
Diversification Opportunities for General Money and Transamerica Funds
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between General and Transamerica is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Transamerica Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Funds and General Money 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 General Money Market are associated (or correlated) with Transamerica Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Funds has no effect on the direction of General Money i.e., General Money and Transamerica Funds go up and down completely randomly.
Pair Corralation between General Money and Transamerica Funds
Assuming the 90 days horizon General Money Market is expected to generate about the same return on investment as Transamerica Funds . However, General Money is 1.61 times more volatile than Transamerica Funds . It trades about 0.06 of its potential returns per unit of risk. Transamerica Funds is currently producing about 0.1 per unit of risk. If you would invest 96.00 in Transamerica Funds on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Transamerica Funds or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
General Money Market vs. Transamerica Funds
Performance |
| Timeline |
| General Money Market |
| Transamerica Funds |
General Money and Transamerica Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Transamerica Funds
The main advantage of trading using opposite General Money and Transamerica Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Transamerica Funds 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 Transamerica Funds will offset losses from the drop in Transamerica Funds' long position.| General Money vs. T Rowe Price | General Money vs. Multisector Bond Sma | General Money vs. Ambrus Core Bond | General Money vs. Blrc Sgy Mnp |
| Transamerica Funds vs. Eip Growth And | Transamerica Funds vs. Qs Moderate Growth | Transamerica Funds vs. Pace Smallmedium Growth | Transamerica Funds vs. Smallcap Growth 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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