Correlation Between New Perspective and Scharf Fund
Can any of the company-specific risk be diversified away by investing in both New Perspective and Scharf Fund 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 New Perspective and Scharf Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Scharf Fund Retail, you can compare the effects of market volatilities on New Perspective and Scharf Fund 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 New Perspective with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Scharf Fund.
Diversification Opportunities for New Perspective and Scharf Fund
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Scharf is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Scharf Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Fund Retail and New Perspective 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 New Perspective Fund are associated (or correlated) with Scharf Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Fund Retail has no effect on the direction of New Perspective i.e., New Perspective and Scharf Fund go up and down completely randomly.
Pair Corralation between New Perspective and Scharf Fund
Assuming the 90 days horizon New Perspective is expected to generate 3.47 times less return on investment than Scharf Fund. In addition to that, New Perspective is 1.04 times more volatile than Scharf Fund Retail. It trades about 0.09 of its total potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.32 per unit of volatility. If you would invest 5,487 in Scharf Fund Retail on August 31, 2024 and sell it today you would earn a total of 270.00 from holding Scharf Fund Retail or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
New Perspective Fund vs. Scharf Fund Retail
Performance |
| Timeline |
| New Perspective |
| Scharf Fund Retail |
New Perspective and Scharf Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Scharf Fund
The main advantage of trading using opposite New Perspective and Scharf Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Scharf Fund 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 Scharf Fund will offset losses from the drop in Scharf Fund's long position.| New Perspective vs. Americafirst Large Cap | New Perspective vs. Touchstone Large Cap | New Perspective vs. Qs Large Cap | New Perspective vs. Large Cap Growth Profund |
| Scharf Fund vs. Aquagold International | Scharf Fund vs. Morningstar Unconstrained Allocation | Scharf Fund vs. Thrivent High Yield | Scharf Fund vs. Via Renewables |
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 CEOs Directory module to screen CEOs from public companies around the world.
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