Correlation Between Quantitative and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Quantitative and Growth Fund 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 Quantitative and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Growth Fund Of, you can compare the effects of market volatilities on Quantitative and Growth Fund 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 Quantitative with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative and Growth Fund.
Diversification Opportunities for Quantitative and Growth Fund
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Quantitative and Growth is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Quantitative 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 Quantitative Longshort Equity are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Quantitative i.e., Quantitative and Growth Fund go up and down completely randomly.
Pair Corralation between Quantitative and Growth Fund
Assuming the 90 days horizon Quantitative is expected to generate 2.52 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Quantitative Longshort Equity is 2.84 times less risky than Growth Fund. It trades about 0.1 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,133 in Growth Fund Of on August 30, 2024 and sell it today you would earn a total of 2,772 from holding Growth Fund Of or generate 54.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Growth Fund Of
Performance |
| Timeline |
| Quantitative Longshort |
| Growth Fund |
Quantitative and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative and Growth Fund
The main advantage of trading using opposite Quantitative and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Quantitative vs. Glenmede International Secured | Quantitative vs. Equity Income Portfolio | Quantitative vs. Woman In Leadership | Quantitative vs. Responsible Esg Equity |
| Growth Fund vs. Capital World Growth | Growth Fund vs. Smallcap World Fund | Growth Fund vs. Washington Mutual Investors | Growth Fund vs. Aquagold International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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