Correlation Between 1919 Financial and Scharf Global
Can any of the company-specific risk be diversified away by investing in both 1919 Financial and Scharf Global 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 1919 Financial and Scharf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1919 Financial Services and Scharf Global Opportunity, you can compare the effects of market volatilities on 1919 Financial and Scharf Global 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 1919 Financial with a short position of Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1919 Financial and Scharf Global.
Diversification Opportunities for 1919 Financial and Scharf Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1919 and Scharf is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding 1919 Financial Services and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity and 1919 Financial 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 1919 Financial Services are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of 1919 Financial i.e., 1919 Financial and Scharf Global go up and down completely randomly.
Pair Corralation between 1919 Financial and Scharf Global
Assuming the 90 days horizon 1919 Financial Services is expected to generate 1.74 times more return on investment than Scharf Global. However, 1919 Financial is 1.74 times more volatile than Scharf Global Opportunity. It trades about 0.06 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.08 per unit of risk. If you would invest 2,555 in 1919 Financial Services on September 3, 2024 and sell it today you would earn a total of 874.00 from holding 1919 Financial Services or generate 34.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1919 Financial Services vs. Scharf Global Opportunity
Performance |
| Timeline |
| 1919 Financial Services |
| Scharf Global Opportunity |
1919 Financial and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1919 Financial and Scharf Global
The main advantage of trading using opposite 1919 Financial and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1919 Financial position performs unexpectedly, Scharf Global 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 Global will offset losses from the drop in Scharf Global's long position.| 1919 Financial vs. Gabelli Global Financial | 1919 Financial vs. Mesirow Financial Small | 1919 Financial vs. Icon Financial Fund | 1919 Financial vs. Prudential Jennison Financial |
| Scharf Global vs. Prudential Jennison Financial | Scharf Global vs. 1919 Financial Services | Scharf Global vs. Mesirow Financial Small | Scharf Global vs. Gabelli Global Financial |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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