Correlation Between Nova Fund and Health Care
Can any of the company-specific risk be diversified away by investing in both Nova Fund and Health Care 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 Nova Fund and Health Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Fund Class and Health Care Fund, you can compare the effects of market volatilities on Nova Fund and Health Care 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 Nova Fund with a short position of Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Fund and Health Care.
Diversification Opportunities for Nova Fund and Health Care
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nova and Health is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nova Fund Class and Health Care Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Fund and Nova 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 Nova Fund Class are associated (or correlated) with Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Fund has no effect on the direction of Nova Fund i.e., Nova Fund and Health Care go up and down completely randomly.
Pair Corralation between Nova Fund and Health Care
Assuming the 90 days horizon Nova Fund Class is expected to generate 1.22 times more return on investment than Health Care. However, Nova Fund is 1.22 times more volatile than Health Care Fund. It trades about 0.35 of its potential returns per unit of risk. Health Care Fund is currently generating about 0.1 per unit of risk. If you would invest 12,627 in Nova Fund Class on September 1, 2024 and sell it today you would earn a total of 1,078 from holding Nova Fund Class or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Fund Class vs. Health Care Fund
Performance |
| Timeline |
| Nova Fund Class |
| Health Care Fund |
Nova Fund and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Fund and Health Care
The main advantage of trading using opposite Nova Fund and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Fund position performs unexpectedly, Health Care 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 Health Care will offset losses from the drop in Health Care's long position.| Nova Fund vs. Rbc Microcap Value | Nova Fund vs. Rbb Fund | Nova Fund vs. Fabxx | Nova Fund vs. Scharf Global Opportunity |
| Health Care vs. Kinetics Small Cap | Health Care vs. Victory Rs Small | Health Care vs. Tax Managed Mid Small | Health Care vs. Artisan Small Cap |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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