Correlation Between Balanced Strategy and Great West
Can any of the company-specific risk be diversified away by investing in both Balanced Strategy and Great West 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 Balanced Strategy and Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Strategy Fund and Great West Loomis Sayles, you can compare the effects of market volatilities on Balanced Strategy and Great West 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 Balanced Strategy with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Great West.
Diversification Opportunities for Balanced Strategy and Great West
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Great is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis and Balanced 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 Balanced Strategy Fund are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Great West go up and down completely randomly.
Pair Corralation between Balanced Strategy and Great West
Assuming the 90 days horizon Balanced Strategy is expected to generate 1.57 times less return on investment than Great West. But when comparing it to its historical volatility, Balanced Strategy Fund is 1.71 times less risky than Great West. It trades about 0.19 of its potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,856 in Great West Loomis Sayles on November 5, 2024 and sell it today you would earn a total of 117.00 from holding Great West Loomis Sayles or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Strategy Fund vs. Great West Loomis Sayles
Performance |
| Timeline |
| Balanced Strategy |
| Great West Loomis |
Balanced Strategy and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Strategy and Great West
The main advantage of trading using opposite Balanced Strategy and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Balanced Strategy vs. Ashmore Emerging Markets | Balanced Strategy vs. Barings Emerging Markets | Balanced Strategy vs. Siit Emerging Markets | Balanced Strategy vs. Artisan Developing World |
| Great West vs. Smallcap World Fund | Great West vs. Small Cap Equity | Great West vs. Locorr Dynamic Equity | Great West vs. The Growth Equity |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |