Correlation Between Large-cap Growth and Cognios Market
Can any of the company-specific risk be diversified away by investing in both Large-cap Growth and Cognios Market 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 Large-cap Growth and Cognios Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Cognios Market Neutral, you can compare the effects of market volatilities on Large-cap Growth and Cognios Market 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 Large-cap Growth with a short position of Cognios Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large-cap Growth and Cognios Market.
Diversification Opportunities for Large-cap Growth and Cognios Market
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Large-cap and Cognios is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund and Cognios Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognios Market Neutral and Large-cap Growth 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 Large Cap Growth Profund are associated (or correlated) with Cognios Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognios Market Neutral has no effect on the direction of Large-cap Growth i.e., Large-cap Growth and Cognios Market go up and down completely randomly.
Pair Corralation between Large-cap Growth and Cognios Market
Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 3.39 times more return on investment than Cognios Market. However, Large-cap Growth is 3.39 times more volatile than Cognios Market Neutral. It trades about 0.04 of its potential returns per unit of risk. Cognios Market Neutral is currently generating about -0.08 per unit of risk. If you would invest 4,483 in Large Cap Growth Profund on November 27, 2024 and sell it today you would earn a total of 97.00 from holding Large Cap Growth Profund or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 51.72% |
| Values | Daily Returns |
Large Cap Growth Profund vs. Cognios Market Neutral
Performance |
| Timeline |
| Large Cap Growth |
| Cognios Market Neutral |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Large-cap Growth and Cognios Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large-cap Growth and Cognios Market
The main advantage of trading using opposite Large-cap Growth and Cognios Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large-cap Growth position performs unexpectedly, Cognios Market 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 Cognios Market will offset losses from the drop in Cognios Market's long position.| Large-cap Growth vs. Jpmorgan Emerging Markets | Large-cap Growth vs. Hartford Schroders Emerging | Large-cap Growth vs. Pnc Emerging Markets | Large-cap Growth vs. Siit Emerging Markets |
| Cognios Market vs. Aqr Long Short Equity | Cognios Market vs. Aqr Equity Market | Cognios Market vs. Cognios Market Neutral | Cognios Market vs. Aqr Managed Futures |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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