Correlation Between Growth Strategy and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Scharf Global 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 Growth Strategy and Scharf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Scharf Global Opportunity, you can compare the effects of market volatilities on Growth Strategy and Scharf Global 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 Growth Strategy with a short position of Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Scharf Global.
Diversification Opportunities for Growth Strategy and Scharf Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Growth and Scharf is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity and Growth Strategy 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 Growth Strategy Fund are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Growth Strategy i.e., Growth Strategy and Scharf Global go up and down completely randomly.
Pair Corralation between Growth Strategy and Scharf Global
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 0.83 times more return on investment than Scharf Global. However, Growth Strategy Fund is 1.21 times less risky than Scharf Global. It trades about 0.05 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about -0.01 per unit of risk. If you would invest 1,197 in Growth Strategy Fund on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Growth Strategy Fund or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Scharf Global Opportunity
Performance |
| Timeline |
| Growth Strategy |
| Scharf Global Opportunity |
Growth Strategy and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Scharf Global
The main advantage of trading using opposite Growth Strategy and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Growth Strategy vs. Transamerica Emerging Markets | Growth Strategy vs. Ep Emerging Markets | Growth Strategy vs. Extended Market Index | Growth Strategy vs. Pnc Emerging Markets |
| Scharf Global vs. Invesco Energy Fund | Scharf Global vs. Goehring Rozencwajg Resources | Scharf Global vs. Oil Gas Ultrasector | Scharf Global vs. Jennison Natural Resources |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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