Correlation Between Sound Shore and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Sound Shore and Clipper Fund 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 Sound Shore and Clipper Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sound Shore Fund and Clipper Fund Inc, you can compare the effects of market volatilities on Sound Shore and Clipper Fund 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 Sound Shore with a short position of Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sound Shore and Clipper Fund.
Diversification Opportunities for Sound Shore and Clipper Fund
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sound and Clipper is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sound Shore Fund and Clipper Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Fund and Sound Shore 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 Sound Shore Fund are associated (or correlated) with Clipper Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Fund has no effect on the direction of Sound Shore i.e., Sound Shore and Clipper Fund go up and down completely randomly.
Pair Corralation between Sound Shore and Clipper Fund
Assuming the 90 days horizon Sound Shore is expected to generate 3.15 times less return on investment than Clipper Fund. In addition to that, Sound Shore is 1.2 times more volatile than Clipper Fund Inc. It trades about 0.01 of its total potential returns per unit of risk. Clipper Fund Inc is currently generating about 0.05 per unit of volatility. If you would invest 11,599 in Clipper Fund Inc on October 25, 2024 and sell it today you would earn a total of 2,796 from holding Clipper Fund Inc or generate 24.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sound Shore Fund vs. Clipper Fund Inc
Performance |
| Timeline |
| Sound Shore Fund |
| Clipper Fund |
Sound Shore and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sound Shore and Clipper Fund
The main advantage of trading using opposite Sound Shore and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sound Shore position performs unexpectedly, Clipper Fund 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 Clipper Fund will offset losses from the drop in Clipper Fund's long position.| Sound Shore vs. Transamerica Intermediate Muni | Sound Shore vs. Blrc Sgy Mnp | Sound Shore vs. Blackrock Pa Muni | Sound Shore vs. Lord Abbett Intermediate |
| Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth | Clipper Fund vs. Oakmark Select 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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