Correlation Between Largecap Growth and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Largecap Growth and Strategic Asset 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 Largecap Growth and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Largecap Growth Fund and Strategic Asset Management, you can compare the effects of market volatilities on Largecap Growth and Strategic Asset 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 Largecap Growth with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Largecap Growth and Strategic Asset.
Diversification Opportunities for Largecap Growth and Strategic Asset
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Largecap and Strategic is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Largecap Growth Fund and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana and Largecap Growth 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 Largecap Growth Fund are associated (or correlated) with Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Largecap Growth i.e., Largecap Growth and Strategic Asset go up and down completely randomly.
Pair Corralation between Largecap Growth and Strategic Asset
Assuming the 90 days horizon Largecap Growth Fund is expected to generate 2.26 times more return on investment than Strategic Asset. However, Largecap Growth is 2.26 times more volatile than Strategic Asset Management. It trades about 0.17 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.27 per unit of risk. If you would invest 2,135 in Largecap Growth Fund on August 31, 2024 and sell it today you would earn a total of 82.00 from holding Largecap Growth Fund or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Largecap Growth Fund vs. Strategic Asset Management
Performance |
| Timeline |
| Largecap Growth |
| Strategic Asset Mana |
Largecap Growth and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Largecap Growth and Strategic Asset
The main advantage of trading using opposite Largecap Growth and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Largecap Growth position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Largecap Growth vs. Alternative Asset Allocation | Largecap Growth vs. Principal Lifetime Hybrid | Largecap Growth vs. Federated Kaufmann Large | Largecap Growth vs. Legg Mason Bw |
| Strategic Asset vs. Federated Ohio Municipal | Strategic Asset vs. Oklahoma Municipal Fund | Strategic Asset vs. Transamerica Intermediate Muni | Strategic Asset vs. Legg Mason Partners |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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