Correlation Between Pacific Funds and International Investors
Can any of the company-specific risk be diversified away by investing in both Pacific Funds and International Investors 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 Pacific Funds and International Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds High and International Investors Gold, you can compare the effects of market volatilities on Pacific Funds and International Investors 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 Pacific Funds with a short position of International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and International Investors.
Diversification Opportunities for Pacific Funds and International Investors
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and International is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds High and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors and Pacific Funds 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 Pacific Funds High are associated (or correlated) with International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Pacific Funds i.e., Pacific Funds and International Investors go up and down completely randomly.
Pair Corralation between Pacific Funds and International Investors
Assuming the 90 days horizon Pacific Funds High is expected to generate 0.08 times more return on investment than International Investors. However, Pacific Funds High is 12.2 times less risky than International Investors. It trades about 0.06 of its potential returns per unit of risk. International Investors Gold is currently generating about -0.25 per unit of risk. If you would invest 942.00 in Pacific Funds High on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Pacific Funds High or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Funds High vs. International Investors Gold
Performance |
| Timeline |
| Pacific Funds High |
| International Investors |
Pacific Funds and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Funds and International Investors
The main advantage of trading using opposite Pacific Funds and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Pacific Funds vs. Oklahoma Municipal Fund | Pacific Funds vs. Ambrus Core Bond | Pacific Funds vs. Nebraska Municipal Fund | Pacific Funds vs. California Bond Fund |
| International Investors vs. Goldman Sachs Clean | International Investors vs. Gabelli Gold Fund | International Investors vs. Goldman Sachs Centrated | International Investors vs. Precious Metals And |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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