Correlation Between Scharf Fund and American Funds
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and American Funds 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 American Funds 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 American Funds American, you can compare the effects of market volatilities on Scharf Fund and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and American Funds.
Diversification Opportunities for Scharf Fund and American Funds
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scharf and American is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and American Funds American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds American 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds American has no effect on the direction of Scharf Fund i.e., Scharf Fund and American Funds go up and down completely randomly.
Pair Corralation between Scharf Fund and American Funds
Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the American Funds. In addition to that, Scharf Fund is 4.57 times more volatile than American Funds American. It trades about -0.01 of its total potential returns per unit of risk. American Funds American is currently generating about 0.2 per unit of volatility. If you would invest 979.00 in American Funds American on September 13, 2024 and sell it today you would earn a total of 11.00 from holding American Funds American or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. American Funds American
Performance |
| Timeline |
| Scharf Fund Retail |
| American Funds American |
Scharf Fund and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and American Funds
The main advantage of trading using opposite Scharf Fund and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
| American Funds vs. Ab Select Equity | American Funds vs. Artisan Select Equity | American Funds vs. Qs Global Equity | American Funds vs. Scharf Fund Retail |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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