Correlation Between Europacific Growth and Johcm International
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Johcm International 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 Europacific Growth and Johcm International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Johcm International Select, you can compare the effects of market volatilities on Europacific Growth and Johcm International 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 Europacific Growth with a short position of Johcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Johcm International.
Diversification Opportunities for Europacific Growth and Johcm International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Europacific and Johcm is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Johcm International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm International and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Johcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm International has no effect on the direction of Europacific Growth i.e., Europacific Growth and Johcm International go up and down completely randomly.
Pair Corralation between Europacific Growth and Johcm International
Assuming the 90 days horizon Europacific Growth Fund is expected to under-perform the Johcm International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Europacific Growth Fund is 1.07 times less risky than Johcm International. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Johcm International Select is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,414 in Johcm International Select on August 29, 2024 and sell it today you would lose (40.00) from holding Johcm International Select or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Johcm International Select
Performance |
| Timeline |
| Europacific Growth |
| Johcm International |
Europacific Growth and Johcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Johcm International
The main advantage of trading using opposite Europacific Growth and Johcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Johcm International 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 Johcm International will offset losses from the drop in Johcm International's long position.| Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund |
| Johcm International vs. Europacific Growth Fund | Johcm International vs. Europacific Growth Fund | Johcm International vs. Europacific Growth Fund | Johcm International vs. Europacific Growth Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |