Correlation Between Scharf Fund and Aggressive Investors
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Aggressive Investors 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 Scharf Fund and Aggressive Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Aggressive Investors 1, you can compare the effects of market volatilities on Scharf Fund and Aggressive Investors 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 Scharf Fund with a short position of Aggressive Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Aggressive Investors.
Diversification Opportunities for Scharf Fund and Aggressive Investors
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scharf and Aggressive is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Aggressive Investors 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Investors and Scharf 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 Scharf Fund Retail are associated (or correlated) with Aggressive Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Investors has no effect on the direction of Scharf Fund i.e., Scharf Fund and Aggressive Investors go up and down completely randomly.
Pair Corralation between Scharf Fund and Aggressive Investors
Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Aggressive Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Fund Retail is 1.52 times less risky than Aggressive Investors. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Aggressive Investors 1 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,245 in Aggressive Investors 1 on September 13, 2024 and sell it today you would earn a total of 25.00 from holding Aggressive Investors 1 or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Aggressive Investors 1
Performance |
| Timeline |
| Scharf Fund Retail |
| Aggressive Investors |
Scharf Fund and Aggressive Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Aggressive Investors
The main advantage of trading using opposite Scharf Fund and Aggressive Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Aggressive Investors 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 Aggressive Investors will offset losses from the drop in Aggressive Investors' long position.| Scharf Fund vs. Barings Emerging Markets | Scharf Fund vs. Extended Market Index | Scharf Fund vs. T Rowe Price | Scharf Fund vs. Western Asset Diversified |
| Aggressive Investors vs. Ab Fixed Income Shares | Aggressive Investors vs. Scharf Fund Retail | Aggressive Investors vs. Cutler Equity | Aggressive Investors vs. Rbc Global 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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