Correlation Between Lgm Risk and Scharf Fund
Can any of the company-specific risk be diversified away by investing in both Lgm Risk and Scharf 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 Lgm Risk and Scharf Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Scharf Fund Retail, you can compare the effects of market volatilities on Lgm Risk and Scharf 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 Lgm Risk with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Scharf Fund.
Diversification Opportunities for Lgm Risk and Scharf Fund
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lgm and Scharf is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Scharf Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Fund Retail and Lgm Risk 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 Lgm Risk Managed are associated (or correlated) with Scharf Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Fund Retail has no effect on the direction of Lgm Risk i.e., Lgm Risk and Scharf Fund go up and down completely randomly.
Pair Corralation between Lgm Risk and Scharf Fund
Assuming the 90 days horizon Lgm Risk is expected to generate 3.14 times less return on investment than Scharf Fund. But when comparing it to its historical volatility, Lgm Risk Managed is 2.1 times less risky than Scharf Fund. It trades about 0.16 of its potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,518 in Scharf Fund Retail on August 27, 2024 and sell it today you would earn a total of 200.00 from holding Scharf Fund Retail or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lgm Risk Managed vs. Scharf Fund Retail
Performance |
| Timeline |
| Lgm Risk Managed |
| Scharf Fund Retail |
Lgm Risk and Scharf Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Scharf Fund
The main advantage of trading using opposite Lgm Risk and Scharf Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk position performs unexpectedly, Scharf 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 Scharf Fund will offset losses from the drop in Scharf Fund's long position.| Lgm Risk vs. Artisan High Income | Lgm Risk vs. Morningstar Aggressive Growth | Lgm Risk vs. Franklin High Income | Lgm Risk vs. Ab Global Risk |
| Scharf Fund vs. Ab Global Risk | Scharf Fund vs. Pace High Yield | Scharf Fund vs. T Rowe Price | Scharf Fund vs. Lgm Risk Managed |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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