Correlation Between Europe 125x and Nova Fund
Can any of the company-specific risk be diversified away by investing in both Europe 125x and Nova 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 Europe 125x and Nova Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europe 125x Strategy and Nova Fund Investor, you can compare the effects of market volatilities on Europe 125x and Nova 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 Europe 125x with a short position of Nova Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europe 125x and Nova Fund.
Diversification Opportunities for Europe 125x and Nova Fund
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Europe and Nova is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Europe 125x Strategy and Nova Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Fund Investor and Europe 125x 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 Europe 125x Strategy are associated (or correlated) with Nova Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Fund Investor has no effect on the direction of Europe 125x i.e., Europe 125x and Nova Fund go up and down completely randomly.
Pair Corralation between Europe 125x and Nova Fund
Assuming the 90 days horizon Europe 125x is expected to generate 6.8 times less return on investment than Nova Fund. But when comparing it to its historical volatility, Europe 125x Strategy is 1.12 times less risky than Nova Fund. It trades about 0.02 of its potential returns per unit of risk. Nova Fund Investor is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,649 in Nova Fund Investor on August 31, 2024 and sell it today you would earn a total of 5,670 from holding Nova Fund Investor or generate 58.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europe 125x Strategy vs. Nova Fund Investor
Performance |
| Timeline |
| Europe 125x Strategy |
| Nova Fund Investor |
Europe 125x and Nova Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europe 125x and Nova Fund
The main advantage of trading using opposite Europe 125x and Nova Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europe 125x position performs unexpectedly, Nova 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 Nova Fund will offset losses from the drop in Nova Fund's long position.| Europe 125x vs. Ivy Energy Fund | Europe 125x vs. Jennison Natural Resources | Europe 125x vs. Gmo Resources | Europe 125x vs. Oil Gas Ultrasector |
| Nova Fund vs. Issachar Fund Class | Nova Fund vs. Commonwealth Global Fund | Nova Fund vs. Balanced Fund Investor | Nova Fund vs. Bbh Partner 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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