Correlation Between Scharf Fund and Inverse Mid-cap
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Inverse Mid-cap 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 Inverse Mid-cap 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 Inverse Mid Cap Strategy, you can compare the effects of market volatilities on Scharf Fund and Inverse Mid-cap 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 Inverse Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Inverse Mid-cap.
Diversification Opportunities for Scharf Fund and Inverse Mid-cap
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scharf and Inverse is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Inverse Mid Cap Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Mid Cap 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 Inverse Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Mid Cap has no effect on the direction of Scharf Fund i.e., Scharf Fund and Inverse Mid-cap go up and down completely randomly.
Pair Corralation between Scharf Fund and Inverse Mid-cap
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 0.6 times more return on investment than Inverse Mid-cap. However, Scharf Fund Retail is 1.66 times less risky than Inverse Mid-cap. It trades about 0.06 of its potential returns per unit of risk. Inverse Mid Cap Strategy is currently generating about -0.04 per unit of risk. If you would invest 4,860 in Scharf Fund Retail on August 31, 2024 and sell it today you would earn a total of 897.00 from holding Scharf Fund Retail or generate 18.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Inverse Mid Cap Strategy
Performance |
| Timeline |
| Scharf Fund Retail |
| Inverse Mid Cap |
Scharf Fund and Inverse Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Inverse Mid-cap
The main advantage of trading using opposite Scharf Fund and Inverse Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Inverse Mid-cap 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 Inverse Mid-cap will offset losses from the drop in Inverse Mid-cap's long position.| Scharf Fund vs. Aquagold International | Scharf Fund vs. Morningstar Unconstrained Allocation | Scharf Fund vs. Thrivent High Yield | Scharf Fund vs. Via Renewables |
| Inverse Mid-cap vs. Small Cap Equity | Inverse Mid-cap vs. Scharf Fund Retail | Inverse Mid-cap vs. Rbc Global Equity | Inverse Mid-cap vs. Locorr Dynamic Equity |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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