Correlation Between City National and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both City National and Europacific 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 City National and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Europacific Growth Fund, you can compare the effects of market volatilities on City National and Europacific 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 City National with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Europacific Growth.
Diversification Opportunities for City National and Europacific Growth
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Europacific is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and City National 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 City National Rochdale are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of City National i.e., City National and Europacific Growth go up and down completely randomly.
Pair Corralation between City National and Europacific Growth
Assuming the 90 days horizon City National is expected to generate 3.64 times less return on investment than Europacific Growth. But when comparing it to its historical volatility, City National Rochdale is 11.73 times less risky than Europacific Growth. It trades about 0.94 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,152 in Europacific Growth Fund on October 26, 2024 and sell it today you would earn a total of 194.00 from holding Europacific Growth Fund or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Europacific Growth Fund
Performance |
| Timeline |
| City National Rochdale |
| Europacific Growth |
City National and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Europacific Growth
The main advantage of trading using opposite City National and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Europacific 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| City National vs. Fisher Large Cap | City National vs. Hartford Moderate Allocation | City National vs. Rational Strategic Allocation | City National vs. Balanced Allocation Fund |
| Europacific Growth vs. Msift High Yield | Europacific Growth vs. City National Rochdale | Europacific Growth vs. Neuberger Berman Income | Europacific Growth vs. Virtus High Yield |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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