Correlation Between Great West and Income Fund
Can any of the company-specific risk be diversified away by investing in both Great West and Income 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 Great West and Income Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Loomis Sayles and Income Fund Of, you can compare the effects of market volatilities on Great West and Income 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 Great West with a short position of Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Income Fund.
Diversification Opportunities for Great West and Income Fund
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and Income is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund 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 Loomis Sayles are associated (or correlated) with Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Great West i.e., Great West and Income Fund go up and down completely randomly.
Pair Corralation between Great West and Income Fund
Assuming the 90 days horizon Great West Loomis Sayles is expected to under-perform the Income Fund. In addition to that, Great West is 2.51 times more volatile than Income Fund Of. It trades about -0.08 of its total potential returns per unit of risk. Income Fund Of is currently generating about -0.03 per unit of volatility. If you would invest 2,601 in Income Fund Of on September 12, 2024 and sell it today you would lose (6.00) from holding Income Fund Of or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Loomis Sayles vs. Income Fund Of
Performance |
| Timeline |
| Great West Loomis |
| Income Fund |
Great West and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Income Fund
The main advantage of trading using opposite Great West and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Income 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 Income Fund will offset losses from the drop in Income Fund's long position.| Great West vs. Vanguard Small Cap Value | Great West vs. Vanguard Small Cap Value | Great West vs. Us Small Cap | Great West vs. Us Targeted Value |
| Income Fund vs. Great West Loomis Sayles | Income Fund vs. Boston Partners Small | Income Fund vs. Valic Company I | Income Fund vs. Omni Small Cap Value |
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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