Correlation Between Smead Value and Smead Funds
Can any of the company-specific risk be diversified away by investing in both Smead Value and Smead Funds 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 Smead Value and Smead Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smead Value Fund and Smead Funds Trust, you can compare the effects of market volatilities on Smead Value and Smead Funds 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 Smead Value with a short position of Smead Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Value and Smead Funds.
Diversification Opportunities for Smead Value and Smead Funds
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Smead and Smead is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Smead Value Fund and Smead Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Funds Trust and Smead Value 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 Smead Value Fund are associated (or correlated) with Smead Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Funds Trust has no effect on the direction of Smead Value i.e., Smead Value and Smead Funds go up and down completely randomly.
Pair Corralation between Smead Value and Smead Funds
Assuming the 90 days horizon Smead Value Fund is expected to generate 0.9 times more return on investment than Smead Funds. However, Smead Value Fund is 1.11 times less risky than Smead Funds. It trades about 0.05 of its potential returns per unit of risk. Smead Funds Trust is currently generating about 0.04 per unit of risk. If you would invest 7,445 in Smead Value Fund on September 12, 2024 and sell it today you would earn a total of 809.00 from holding Smead Value Fund or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smead Value Fund vs. Smead Funds Trust
Performance |
| Timeline |
| Smead Value Fund |
| Smead Funds Trust |
Smead Value and Smead Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Value and Smead Funds
The main advantage of trading using opposite Smead Value and Smead Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Value position performs unexpectedly, Smead Funds 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 Smead Funds will offset losses from the drop in Smead Funds' long position.| Smead Value vs. Vanguard Value Index | Smead Value vs. Dodge Cox Stock | Smead Value vs. American Mutual Fund | Smead Value vs. American Funds American |
| Smead Funds vs. Balanced Fund Investor | Smead Funds vs. Eic Value Fund | Smead Funds vs. Qs Growth Fund | Smead Funds vs. Century Small Cap |
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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