Correlation Between Scharf Fund and California Municipal
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and California Municipal 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 California Municipal 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 California Municipal Fund, you can compare the effects of market volatilities on Scharf Fund and California Municipal 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 California Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and California Municipal.
Diversification Opportunities for Scharf Fund and California Municipal
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scharf and California is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and California Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Municipal 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 California Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Municipal has no effect on the direction of Scharf Fund i.e., Scharf Fund and California Municipal go up and down completely randomly.
Pair Corralation between Scharf Fund and California Municipal
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 3.75 times more return on investment than California Municipal. However, Scharf Fund is 3.75 times more volatile than California Municipal Fund. It trades about 0.05 of its potential returns per unit of risk. California Municipal Fund is currently generating about 0.09 per unit of risk. If you would invest 4,658 in Scharf Fund Retail on September 14, 2024 and sell it today you would earn a total of 894.00 from holding Scharf Fund Retail or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scharf Fund Retail vs. California Municipal Fund
Performance |
| Timeline |
| Scharf Fund Retail |
| California Municipal |
Scharf Fund and California Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and California Municipal
The main advantage of trading using opposite Scharf Fund and California Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, California Municipal 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 California Municipal will offset losses from the drop in California Municipal'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 |
| California Municipal vs. Multimedia Portfolio Multimedia | California Municipal vs. Artisan Select Equity | California Municipal vs. Scharf Fund Retail | California Municipal vs. Gmo Global 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |