Correlation Between Energy Fund and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Energy Fund and Guinness Atkinson 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 Energy Fund and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fund Investor and Guinness Atkinson Global, you can compare the effects of market volatilities on Energy Fund and Guinness Atkinson 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 Energy Fund with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fund and Guinness Atkinson.
Diversification Opportunities for Energy Fund and Guinness Atkinson
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energy and Guinness is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fund Investor and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global and Energy 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 Energy Fund Investor are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Energy Fund i.e., Energy Fund and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Energy Fund and Guinness Atkinson
Assuming the 90 days horizon Energy Fund Investor is expected to generate 1.11 times more return on investment than Guinness Atkinson. However, Energy Fund is 1.11 times more volatile than Guinness Atkinson Global. It trades about 0.01 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about -0.03 per unit of risk. If you would invest 28,315 in Energy Fund Investor on August 26, 2024 and sell it today you would earn a total of 140.00 from holding Energy Fund Investor or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Fund Investor vs. Guinness Atkinson Global
Performance |
| Timeline |
| Energy Fund Investor |
| Guinness Atkinson Global |
Energy Fund and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Fund and Guinness Atkinson
The main advantage of trading using opposite Energy Fund and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fund position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Energy Fund vs. Energy Services Fund | Energy Fund vs. Basic Materials Fund | Energy Fund vs. Health Care Fund | Energy Fund vs. Precious Metals Fund |
| Guinness Atkinson vs. Guinness Atkinson Alternative | Guinness Atkinson vs. Oil Gas Ultrasector | Guinness Atkinson vs. Global Resources Fund | Guinness Atkinson vs. Invesco Energy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |