Correlation Between Great West and Stringer Growth
Can any of the company-specific risk be diversified away by investing in both Great West and Stringer Growth 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 Great West and Stringer Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Sp Small and Stringer Growth Fund, you can compare the effects of market volatilities on Great West and Stringer Growth 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 Great West with a short position of Stringer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Stringer Growth.
Diversification Opportunities for Great West and Stringer Growth
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Great and Stringer is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Great West Sp Small and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth and Great West 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 Great West Sp Small are associated (or correlated) with Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Great West i.e., Great West and Stringer Growth go up and down completely randomly.
Pair Corralation between Great West and Stringer Growth
Assuming the 90 days horizon Great West Sp Small is expected to under-perform the Stringer Growth. In addition to that, Great West is 2.48 times more volatile than Stringer Growth Fund. It trades about -0.1 of its total potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.1 per unit of volatility. If you would invest 1,260 in Stringer Growth Fund on October 25, 2024 and sell it today you would earn a total of 17.00 from holding Stringer Growth Fund or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Great West Sp Small vs. Stringer Growth Fund
Performance |
| Timeline |
| Great West Sp |
| Stringer Growth |
Great West and Stringer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Stringer Growth
The main advantage of trading using opposite Great West and Stringer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Stringer Growth 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 Stringer Growth will offset losses from the drop in Stringer Growth's long position.| Great West vs. Stringer Growth Fund | Great West vs. Rational Defensive Growth | Great West vs. Qs Defensive Growth | Great West vs. Small Pany Growth |
| Stringer Growth vs. All Asset Fund | Stringer Growth vs. Pimco All Asset | Stringer Growth vs. All Asset Fund | Stringer Growth vs. Pimco All Asset |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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