Correlation Between Schwartz Value and Auer Growth
Can any of the company-specific risk be diversified away by investing in both Schwartz Value and Auer Growth 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 Schwartz Value and Auer Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwartz Value Focused and Auer Growth Fund, you can compare the effects of market volatilities on Schwartz Value and Auer Growth 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 Schwartz Value with a short position of Auer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwartz Value and Auer Growth.
Diversification Opportunities for Schwartz Value and Auer Growth
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schwartz and Auer is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Schwartz Value Focused and Auer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auer Growth Fund and Schwartz Value 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 Schwartz Value Focused are associated (or correlated) with Auer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auer Growth Fund has no effect on the direction of Schwartz Value i.e., Schwartz Value and Auer Growth go up and down completely randomly.
Pair Corralation between Schwartz Value and Auer Growth
Assuming the 90 days horizon Schwartz Value Focused is expected to generate 1.88 times more return on investment than Auer Growth. However, Schwartz Value is 1.88 times more volatile than Auer Growth Fund. It trades about 0.41 of its potential returns per unit of risk. Auer Growth Fund is currently generating about 0.1 per unit of risk. If you would invest 5,909 in Schwartz Value Focused on August 29, 2024 and sell it today you would earn a total of 1,122 from holding Schwartz Value Focused or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schwartz Value Focused vs. Auer Growth Fund
Performance |
| Timeline |
| Schwartz Value Focused |
| Auer Growth Fund |
Schwartz Value and Auer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwartz Value and Auer Growth
The main advantage of trading using opposite Schwartz Value and Auer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwartz Value position performs unexpectedly, Auer Growth 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 Auer Growth will offset losses from the drop in Auer Growth's long position.| Schwartz Value vs. Kinetics Small Cap | Schwartz Value vs. Ave Maria Value | Schwartz Value vs. Kinetics Market Opportunities | Schwartz Value vs. Ave Maria Rising |
| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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