Correlation Between Monetta Young and Hodges Fund
Can any of the company-specific risk be diversified away by investing in both Monetta Young and Hodges 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 Monetta Young and Hodges Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monetta Young Investor and Hodges Fund Retail, you can compare the effects of market volatilities on Monetta Young and Hodges 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 Monetta Young with a short position of Hodges Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monetta Young and Hodges Fund.
Diversification Opportunities for Monetta Young and Hodges Fund
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monetta and Hodges is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Monetta Young Investor and Hodges Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Fund Retail and Monetta Young 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 Monetta Young Investor are associated (or correlated) with Hodges Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Fund Retail has no effect on the direction of Monetta Young i.e., Monetta Young and Hodges Fund go up and down completely randomly.
Pair Corralation between Monetta Young and Hodges Fund
Assuming the 90 days horizon Monetta Young is expected to generate 2.49 times less return on investment than Hodges Fund. But when comparing it to its historical volatility, Monetta Young Investor is 1.32 times less risky than Hodges Fund. It trades about 0.05 of its potential returns per unit of risk. Hodges Fund Retail is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,159 in Hodges Fund Retail on August 31, 2024 and sell it today you would earn a total of 2,785 from holding Hodges Fund Retail or generate 53.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monetta Young Investor vs. Hodges Fund Retail
Performance |
| Timeline |
| Monetta Young Investor |
| Hodges Fund Retail |
Monetta Young and Hodges Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monetta Young and Hodges Fund
The main advantage of trading using opposite Monetta Young and Hodges Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monetta Young position performs unexpectedly, Hodges 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 Hodges Fund will offset losses from the drop in Hodges Fund's long position.| Monetta Young vs. Parnassus Endeavor Fund | Monetta Young vs. Reynolds Blue Chip | Monetta Young vs. Amg Yacktman Focused | Monetta Young vs. Artisan Global Opportunities |
| Hodges Fund vs. Marsico 21st Century | Hodges Fund vs. Kinetics Paradigm Fund | Hodges Fund vs. Royce Smaller Companies Growth | Hodges Fund vs. Polaris Global 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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