Correlation Between Growth Strategy and Union Street
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Union Street 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 Union Street 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 Union Street Partners, you can compare the effects of market volatilities on Growth Strategy and Union Street 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 Union Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Union Street.
Diversification Opportunities for Growth Strategy and Union Street
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and UNION is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Union Street Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Street Partners 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 Union Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Street Partners has no effect on the direction of Growth Strategy i.e., Growth Strategy and Union Street go up and down completely randomly.
Pair Corralation between Growth Strategy and Union Street
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 0.57 times more return on investment than Union Street. However, Growth Strategy Fund is 1.76 times less risky than Union Street. It trades about 0.13 of its potential returns per unit of risk. Union Street Partners is currently generating about 0.05 per unit of risk. If you would invest 1,109 in Growth Strategy Fund on September 2, 2024 and sell it today you would earn a total of 235.00 from holding Growth Strategy Fund or generate 21.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Union Street Partners
Performance |
| Timeline |
| Growth Strategy |
| Union Street Partners |
Growth Strategy and Union Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Union Street
The main advantage of trading using opposite Growth Strategy and Union Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Union Street 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 Union Street will offset losses from the drop in Union Street's long position.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
| Union Street vs. Ashmore Emerging Markets | Union Street vs. Rbc Emerging Markets | Union Street vs. Growth Strategy Fund | Union Street vs. Siit Emerging Markets |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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