Correlation Between Gateway Fund and Persimmon Long/short
Can any of the company-specific risk be diversified away by investing in both Gateway Fund and Persimmon Long/short 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 Gateway Fund and Persimmon Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gateway Fund Class and Persimmon Longshort Fund, you can compare the effects of market volatilities on Gateway Fund and Persimmon Long/short 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 Gateway Fund with a short position of Persimmon Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Fund and Persimmon Long/short.
Diversification Opportunities for Gateway Fund and Persimmon Long/short
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GATEWAY and Persimmon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Fund Class and Persimmon Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Persimmon Long/short and Gateway 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 Gateway Fund Class are associated (or correlated) with Persimmon Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Persimmon Long/short has no effect on the direction of Gateway Fund i.e., Gateway Fund and Persimmon Long/short go up and down completely randomly.
Pair Corralation between Gateway Fund and Persimmon Long/short
Assuming the 90 days horizon Gateway Fund Class is expected to generate 0.87 times more return on investment than Persimmon Long/short. However, Gateway Fund Class is 1.15 times less risky than Persimmon Long/short. It trades about 0.17 of its potential returns per unit of risk. Persimmon Longshort Fund is currently generating about 0.1 per unit of risk. If you would invest 4,590 in Gateway Fund Class on November 9, 2024 and sell it today you would earn a total of 81.00 from holding Gateway Fund Class or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gateway Fund Class vs. Persimmon Longshort Fund
Performance |
| Timeline |
| Gateway Fund Class |
| Persimmon Long/short |
Gateway Fund and Persimmon Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gateway Fund and Persimmon Long/short
The main advantage of trading using opposite Gateway Fund and Persimmon Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway Fund position performs unexpectedly, Persimmon Long/short 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 Persimmon Long/short will offset losses from the drop in Persimmon Long/short's long position.| Gateway Fund vs. Jpmorgan Hedged Equity | Gateway Fund vs. Jpmorgan Hedged Equity | Gateway Fund vs. Jpmorgan Hedged Equity | Gateway Fund vs. Gateway Fund Class |
| Persimmon Long/short vs. Fidelity Advisor Gold | Persimmon Long/short vs. The Gold Bullion | Persimmon Long/short vs. International Investors Gold | Persimmon Long/short vs. Gabelli Gold 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |