Correlation Between Locorr Dynamic and Scharf Fund
Can any of the company-specific risk be diversified away by investing in both Locorr Dynamic 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 Locorr Dynamic and Scharf Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Dynamic Equity and Scharf Fund Retail, you can compare the effects of market volatilities on Locorr Dynamic 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 Locorr Dynamic with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Dynamic and Scharf Fund.
Diversification Opportunities for Locorr Dynamic and Scharf Fund
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Locorr and Scharf is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Dynamic Equity 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 Locorr Dynamic 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 Locorr Dynamic Equity 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 Locorr Dynamic i.e., Locorr Dynamic and Scharf Fund go up and down completely randomly.
Pair Corralation between Locorr Dynamic and Scharf Fund
Assuming the 90 days horizon Locorr Dynamic Equity is expected to generate 0.68 times more return on investment than Scharf Fund. However, Locorr Dynamic Equity is 1.46 times less risky than Scharf Fund. It trades about 0.4 of its potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.14 per unit of risk. If you would invest 1,253 in Locorr Dynamic Equity on August 25, 2024 and sell it today you would earn a total of 57.00 from holding Locorr Dynamic Equity or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Dynamic Equity vs. Scharf Fund Retail
Performance |
| Timeline |
| Locorr Dynamic Equity |
| Scharf Fund Retail |
Locorr Dynamic and Scharf Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Dynamic and Scharf Fund
The main advantage of trading using opposite Locorr Dynamic and Scharf Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Dynamic 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.| Locorr Dynamic vs. Scharf Fund Retail | Locorr Dynamic vs. Federated Equity Income | Locorr Dynamic vs. Locorr Dynamic Equity | Locorr Dynamic vs. Gmo Equity Allocation |
| Scharf Fund vs. Qs International Equity | Scharf Fund vs. Gmo Global Equity | Scharf Fund vs. The Hartford Equity | Scharf Fund vs. The Hartford Equity |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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