Correlation Between Scharf Fund and Income Fund
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Income 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 Scharf Fund and Income Fund 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 Income Fund Of, you can compare the effects of market volatilities on Scharf Fund and Income 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 Scharf Fund with a short position of Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Income Fund.
Diversification Opportunities for Scharf Fund and Income Fund
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scharf and Income is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Scharf Fund i.e., Scharf Fund and Income Fund go up and down completely randomly.
Pair Corralation between Scharf Fund and Income Fund
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 1.3 times more return on investment than Income Fund. However, Scharf Fund is 1.3 times more volatile than Income Fund Of. It trades about 0.13 of its potential returns per unit of risk. Income Fund Of is currently generating about 0.16 per unit of risk. If you would invest 5,153 in Scharf Fund Retail on September 3, 2024 and sell it today you would earn a total of 610.00 from holding Scharf Fund Retail or generate 11.84% 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. Income Fund Of
Performance |
| Timeline |
| Scharf Fund Retail |
| Income Fund |
Scharf Fund and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Income Fund
The main advantage of trading using opposite Scharf Fund and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Income 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 Income Fund will offset losses from the drop in Income Fund's long position.| Scharf Fund vs. Angel Oak Financial | Scharf Fund vs. Icon Financial Fund | Scharf Fund vs. Mesirow Financial Small | Scharf Fund vs. Gabelli Global Financial |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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