Correlation Between Nova Fund and Eic Value
Can any of the company-specific risk be diversified away by investing in both Nova Fund and Eic Value 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 Eic Value 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 Eic Value Fund, you can compare the effects of market volatilities on Nova Fund and Eic Value 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 Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Fund and Eic Value.
Diversification Opportunities for Nova Fund and Eic Value
Weak diversification
The 3 months correlation between Nova and Eic is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nova Fund Class and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value 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 Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Nova Fund i.e., Nova Fund and Eic Value go up and down completely randomly.
Pair Corralation between Nova Fund and Eic Value
Assuming the 90 days horizon Nova Fund Class is expected to under-perform the Eic Value. In addition to that, Nova Fund is 1.94 times more volatile than Eic Value Fund. It trades about -0.04 of its total potential returns per unit of risk. Eic Value Fund is currently generating about 0.08 per unit of volatility. If you would invest 1,770 in Eic Value Fund on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Eic Value Fund or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Fund Class vs. Eic Value Fund
Performance |
| Timeline |
| Nova Fund Class |
| Eic Value Fund |
Nova Fund and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Fund and Eic Value
The main advantage of trading using opposite Nova Fund and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Fund position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.| Nova Fund vs. Channing Intrinsic Value | Nova Fund vs. T Rowe Price | Nova Fund vs. Ishares Russell 2000 | Nova Fund vs. Inverse Mid Cap Strategy |
| Eic Value vs. Prudential California Muni | Eic Value vs. Us Government Securities | Eic Value vs. John Hancock Government | Eic Value vs. Vanguard Intermediate Term Government |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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