Correlation Between Greenspring Fund and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Greenspring Fund and Dow Jones 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 Greenspring Fund and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenspring Fund Retail and Dow Jones Industrial, you can compare the effects of market volatilities on Greenspring Fund and Dow Jones 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 Greenspring Fund with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenspring Fund and Dow Jones.
Diversification Opportunities for Greenspring Fund and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greenspring and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Greenspring Fund Retail and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Greenspring 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 Greenspring Fund Retail are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Greenspring Fund i.e., Greenspring Fund and Dow Jones go up and down completely randomly.
Pair Corralation between Greenspring Fund and Dow Jones
Assuming the 90 days horizon Greenspring Fund is expected to generate 1.05 times less return on investment than Dow Jones. In addition to that, Greenspring Fund is 1.33 times more volatile than Dow Jones Industrial. It trades about 0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,780,639 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 568,144 from holding Dow Jones Industrial or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Greenspring Fund Retail vs. Dow Jones Industrial
Performance |
| Timeline |
Greenspring Fund and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Greenspring Fund Retail
Pair trading matchups for Greenspring Fund
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Greenspring Fund and Dow Jones
The main advantage of trading using opposite Greenspring Fund and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenspring Fund position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Greenspring Fund vs. Berwyn Income Fund | Greenspring Fund vs. Fpa Crescent Fund | Greenspring Fund vs. James Balanced Golden | Greenspring Fund vs. Permanent Portfolio Class |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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