Correlation Between Stringer Growth and California Intermediate-ter
Can any of the company-specific risk be diversified away by investing in both Stringer Growth and California Intermediate-ter 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 Stringer Growth and California Intermediate-ter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stringer Growth Fund and California Intermediate Term Tax Free, you can compare the effects of market volatilities on Stringer Growth and California Intermediate-ter 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 Stringer Growth with a short position of California Intermediate-ter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stringer Growth and California Intermediate-ter.
Diversification Opportunities for Stringer Growth and California Intermediate-ter
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stringer and California is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Stringer Growth Fund and California Intermediate Term T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate-ter and Stringer Growth 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 Stringer Growth Fund are associated (or correlated) with California Intermediate-ter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate-ter has no effect on the direction of Stringer Growth i.e., Stringer Growth and California Intermediate-ter go up and down completely randomly.
Pair Corralation between Stringer Growth and California Intermediate-ter
Assuming the 90 days horizon Stringer Growth Fund is expected to generate 3.32 times more return on investment than California Intermediate-ter. However, Stringer Growth is 3.32 times more volatile than California Intermediate Term Tax Free. It trades about 0.02 of its potential returns per unit of risk. California Intermediate Term Tax Free is currently generating about -0.02 per unit of risk. If you would invest 1,261 in Stringer Growth Fund on October 25, 2024 and sell it today you would earn a total of 11.00 from holding Stringer Growth Fund or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Stringer Growth Fund vs. California Intermediate Term T
Performance |
| Timeline |
| Stringer Growth |
| California Intermediate-ter |
Stringer Growth and California Intermediate-ter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stringer Growth and California Intermediate-ter
The main advantage of trading using opposite Stringer Growth and California Intermediate-ter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stringer Growth position performs unexpectedly, California Intermediate-ter 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 California Intermediate-ter will offset losses from the drop in California Intermediate-ter's long position.| Stringer Growth vs. All Asset Fund | Stringer Growth vs. Pimco All Asset | Stringer Growth vs. All Asset Fund | Stringer Growth vs. Pimco All Asset |
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 Correlations module to find global opportunities by holding instruments from different markets.
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