Correlation Between High Yield and Scharf Fund
Can any of the company-specific risk be diversified away by investing in both High Yield and Scharf 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 High Yield and Scharf Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund and Scharf Fund Retail, you can compare the effects of market volatilities on High Yield and Scharf 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 High Yield with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Scharf Fund.
Diversification Opportunities for High Yield and Scharf Fund
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and Scharf is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund and Scharf Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Fund Retail and High Yield 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 High Yield Fund are associated (or correlated) with Scharf Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Fund Retail has no effect on the direction of High Yield i.e., High Yield and Scharf Fund go up and down completely randomly.
Pair Corralation between High Yield and Scharf Fund
Assuming the 90 days horizon High Yield is expected to generate 7.3 times less return on investment than Scharf Fund. But when comparing it to its historical volatility, High Yield Fund is 3.4 times less risky than Scharf Fund. It trades about 0.2 of its potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 5,453 in Scharf Fund Retail on September 4, 2024 and sell it today you would earn a total of 310.00 from holding Scharf Fund Retail or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
High Yield Fund vs. Scharf Fund Retail
Performance |
| Timeline |
| High Yield Fund |
| Scharf Fund Retail |
High Yield and Scharf Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Scharf Fund
The main advantage of trading using opposite High Yield and Scharf Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Scharf 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 Scharf Fund will offset losses from the drop in Scharf Fund's long position.| High Yield vs. Touchstone Sands Capital | High Yield vs. Mid Cap Growth | High Yield vs. Mid Cap Growth | High Yield vs. Sentinel Small Pany |
| Scharf Fund vs. Dana Large Cap | Scharf Fund vs. Qs Large Cap | Scharf Fund vs. Avantis Large Cap | Scharf Fund vs. Fidelity Series 1000 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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