Correlation Between Scharf Fund and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Federated Kaufmann 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 Kaufmann 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 Kaufmann Fund, you can compare the effects of market volatilities on Scharf Fund and Federated Kaufmann 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 Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Federated Kaufmann.
Diversification Opportunities for Scharf Fund and Federated Kaufmann
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Federated is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Federated Kaufmann Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann 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 Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann has no effect on the direction of Scharf Fund i.e., Scharf Fund and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Scharf Fund and Federated Kaufmann
Assuming the 90 days horizon Scharf Fund is expected to generate 1.55 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Scharf Fund Retail is 1.34 times less risky than Federated Kaufmann. It trades about 0.06 of its potential returns per unit of risk. Federated Kaufmann Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 505.00 in Federated Kaufmann Fund on September 4, 2024 and sell it today you would earn a total of 183.00 from holding Federated Kaufmann Fund or generate 36.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scharf Fund Retail vs. Federated Kaufmann Fund
Performance |
| Timeline |
| Scharf Fund Retail |
| Federated Kaufmann |
Scharf Fund and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Federated Kaufmann
The main advantage of trading using opposite Scharf Fund and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Scharf Fund vs. Dana Large Cap | Scharf Fund vs. Qs Large Cap | Scharf Fund vs. Avantis Large Cap | Scharf Fund vs. Fidelity Series 1000 |
| Federated Kaufmann vs. Federated Emerging Market | Federated Kaufmann vs. Federated Mdt All | Federated Kaufmann vs. Federated Mdt Balanced | Federated Kaufmann vs. Federated Global Allocation |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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