Correlation Between Schwab Health and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Schwab Health and Akre Focus 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 Schwab Health and Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab Health Care and Akre Focus Fund, you can compare the effects of market volatilities on Schwab Health and Akre Focus 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 Schwab Health with a short position of Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab Health and Akre Focus.
Diversification Opportunities for Schwab Health and Akre Focus
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Schwab and Akre is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Health Care and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund and Schwab Health 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 Schwab Health Care are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Schwab Health i.e., Schwab Health and Akre Focus go up and down completely randomly.
Pair Corralation between Schwab Health and Akre Focus
Assuming the 90 days horizon Schwab Health Care is expected to under-perform the Akre Focus. In addition to that, Schwab Health is 1.06 times more volatile than Akre Focus Fund. It trades about -0.23 of its total potential returns per unit of risk. Akre Focus Fund is currently generating about 0.24 per unit of volatility. If you would invest 6,752 in Akre Focus Fund on August 26, 2024 and sell it today you would earn a total of 274.00 from holding Akre Focus Fund or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schwab Health Care vs. Akre Focus Fund
Performance |
| Timeline |
| Schwab Health Care |
| Akre Focus Fund |
Schwab Health and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwab Health and Akre Focus
The main advantage of trading using opposite Schwab Health and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab Health position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Schwab Health vs. Fidelity Advisor Financial | Schwab Health vs. Blackrock Financial Institutions | Schwab Health vs. Prudential Jennison Financial | Schwab Health vs. 1919 Financial Services |
| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Primecap Odyssey Growth |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |