Correlation Between Scharf Fund and Federated Government
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Federated Government 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 Federated Government 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 Federated Government Income, you can compare the effects of market volatilities on Scharf Fund and Federated Government 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 Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Federated Government.
Diversification Opportunities for Scharf Fund and Federated Government
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scharf and Federated is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Federated Government Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government 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 Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Scharf Fund i.e., Scharf Fund and Federated Government go up and down completely randomly.
Pair Corralation between Scharf Fund and Federated Government
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 1.82 times more return on investment than Federated Government. However, Scharf Fund is 1.82 times more volatile than Federated Government Income. It trades about 0.04 of its potential returns per unit of risk. Federated Government Income is currently generating about 0.06 per unit of risk. If you would invest 5,136 in Scharf Fund Retail on September 14, 2024 and sell it today you would earn a total of 416.00 from holding Scharf Fund Retail or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Federated Government Income
Performance |
| Timeline |
| Scharf Fund Retail |
| Federated Government |
Scharf Fund and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Federated Government
The main advantage of trading using opposite Scharf Fund and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Federated Government 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 Federated Government will offset losses from the drop in Federated Government's long position.| Scharf Fund vs. Scharf Global Opportunity | Scharf Fund vs. Scharf Balanced Opportunity | Scharf Fund vs. Scharf Balanced Opportunity | Scharf Fund vs. American Funds 2060 |
| Federated Government vs. Qs Global Equity | Federated Government vs. Scharf Fund Retail | Federated Government vs. Multimedia Portfolio Multimedia | Federated Government vs. Ms Global Fixed |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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