Correlation Between Scharf Fund and Balanced Fund
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Balanced 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 Balanced 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 Balanced Fund Retail, you can compare the effects of market volatilities on Scharf Fund and Balanced 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 Balanced Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Balanced Fund.
Diversification Opportunities for Scharf Fund and Balanced Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Balanced is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Balanced Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Retail 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 Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Retail has no effect on the direction of Scharf Fund i.e., Scharf Fund and Balanced Fund go up and down completely randomly.
Pair Corralation between Scharf Fund and Balanced Fund
Assuming the 90 days horizon Scharf Fund is expected to generate 1.21 times less return on investment than Balanced Fund. In addition to that, Scharf Fund is 1.31 times more volatile than Balanced Fund Retail. It trades about 0.06 of its total potential returns per unit of risk. Balanced Fund Retail is currently generating about 0.1 per unit of volatility. If you would invest 1,145 in Balanced Fund Retail on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Balanced Fund Retail or generate 26.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Balanced Fund Retail
Performance |
| Timeline |
| Scharf Fund Retail |
| Balanced Fund Retail |
Scharf Fund and Balanced Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Balanced Fund
The main advantage of trading using opposite Scharf Fund and Balanced Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Balanced 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 Balanced Fund will offset losses from the drop in Balanced Fund's long position.| Scharf Fund vs. Guidepath Managed Futures | Scharf Fund vs. Asg Managed Futures | Scharf Fund vs. Oklahoma College Savings | Scharf Fund vs. Blackrock Inflation Protected |
| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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