Correlation Between Portfolio and Appleseed Fund
Can any of the company-specific risk be diversified away by investing in both Portfolio and Appleseed 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 Portfolio and Appleseed Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Portfolio 21 Global and Appleseed Fund Appleseed, you can compare the effects of market volatilities on Portfolio and Appleseed 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 Portfolio with a short position of Appleseed Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portfolio and Appleseed Fund.
Diversification Opportunities for Portfolio and Appleseed Fund
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Portfolio and Appleseed is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Portfolio 21 Global and Appleseed Fund Appleseed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appleseed Fund Appleseed and Portfolio 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 Portfolio 21 Global are associated (or correlated) with Appleseed Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appleseed Fund Appleseed has no effect on the direction of Portfolio i.e., Portfolio and Appleseed Fund go up and down completely randomly.
Pair Corralation between Portfolio and Appleseed Fund
Assuming the 90 days horizon Portfolio is expected to generate 21.48 times less return on investment than Appleseed Fund. In addition to that, Portfolio is 1.16 times more volatile than Appleseed Fund Appleseed. It trades about 0.0 of its total potential returns per unit of risk. Appleseed Fund Appleseed is currently generating about 0.06 per unit of volatility. If you would invest 1,215 in Appleseed Fund Appleseed on December 13, 2024 and sell it today you would earn a total of 227.00 from holding Appleseed Fund Appleseed or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Portfolio 21 Global vs. Appleseed Fund Appleseed
Performance |
| Timeline |
| Portfolio 21 Global |
| Appleseed Fund Appleseed |
Portfolio and Appleseed Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Portfolio and Appleseed Fund
The main advantage of trading using opposite Portfolio and Appleseed Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portfolio position performs unexpectedly, Appleseed 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 Appleseed Fund will offset losses from the drop in Appleseed Fund's long position.| Portfolio vs. New Alternatives Fund | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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