Correlation Between Small Cap and Eic Value
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Core and Eic Value Fund, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Eic Value.
Diversification Opportunities for Small Cap and Eic Value
Almost no diversification
The 3 months correlation between Small and Eic is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Core 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 Small Cap 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 Small Cap Core 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 Small Cap i.e., Small Cap and Eic Value go up and down completely randomly.
Pair Corralation between Small Cap and Eic Value
Assuming the 90 days horizon Small Cap Core is expected to generate 2.23 times more return on investment than Eic Value. However, Small Cap is 2.23 times more volatile than Eic Value Fund. It trades about 0.14 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.13 per unit of risk. If you would invest 1,337 in Small Cap Core on September 2, 2024 and sell it today you would earn a total of 156.00 from holding Small Cap Core or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Core vs. Eic Value Fund
Performance |
| Timeline |
| Small Cap Core |
| Eic Value Fund |
Small Cap and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Eic Value
The main advantage of trading using opposite Small Cap and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Strategic Allocation Aggressive | Small Cap vs. Legg Mason Partners | Small Cap vs. Aqr Risk Balanced Modities | Small Cap vs. Pace High Yield |
| Eic Value vs. Alliancebernstein National Municipal | Eic Value vs. Pace Municipal Fixed | Eic Value vs. The National Tax Free | Eic Value vs. Bbh Intermediate Municipal |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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