Correlation Between Growth Fund and Enhanced Fixed
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Enhanced Fixed 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 Fund and Enhanced Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Enhanced Fixed Income, you can compare the effects of market volatilities on Growth Fund and Enhanced Fixed 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 Fund with a short position of Enhanced Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Enhanced Fixed.
Diversification Opportunities for Growth Fund and Enhanced Fixed
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and Enhanced is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Enhanced Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Fixed Income and Growth Fund 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 Fund Of are associated (or correlated) with Enhanced Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Fixed Income has no effect on the direction of Growth Fund i.e., Growth Fund and Enhanced Fixed go up and down completely randomly.
Pair Corralation between Growth Fund and Enhanced Fixed
Assuming the 90 days horizon Growth Fund Of is expected to generate 3.24 times more return on investment than Enhanced Fixed. However, Growth Fund is 3.24 times more volatile than Enhanced Fixed Income. It trades about 0.06 of its potential returns per unit of risk. Enhanced Fixed Income is currently generating about 0.06 per unit of risk. If you would invest 6,434 in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of 1,076 from holding Growth Fund Of or generate 16.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Enhanced Fixed Income
Performance |
| Timeline |
| Growth Fund |
| Enhanced Fixed Income |
Growth Fund and Enhanced Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Enhanced Fixed
The main advantage of trading using opposite Growth Fund and Enhanced Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Enhanced Fixed 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 Enhanced Fixed will offset losses from the drop in Enhanced Fixed's long position.| Growth Fund vs. Lord Abbett Convertible | Growth Fund vs. Gabelli Convertible And | Growth Fund vs. Calamos Dynamic Convertible | Growth Fund vs. Virtus Convertible |
| Enhanced Fixed vs. Stringer Growth Fund | Enhanced Fixed vs. Praxis Genesis Growth | Enhanced Fixed vs. Small Pany Growth | Enhanced Fixed vs. Rational Defensive Growth |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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