Correlation Between Select Fund and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Select Fund and Europacific Growth 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 Select Fund and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Fund A and Europacific Growth Fund, you can compare the effects of market volatilities on Select Fund and Europacific Growth 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 Select Fund with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Europacific Growth.
Diversification Opportunities for Select Fund and Europacific Growth
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Select and Europacific is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund A and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Select Fund 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 Select Fund A are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Select Fund i.e., Select Fund and Europacific Growth go up and down completely randomly.
Pair Corralation between Select Fund and Europacific Growth
Assuming the 90 days horizon Select Fund A is expected to generate 1.28 times more return on investment than Europacific Growth. However, Select Fund is 1.28 times more volatile than Europacific Growth Fund. It trades about 0.08 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.03 per unit of risk. If you would invest 8,945 in Select Fund A on August 31, 2024 and sell it today you would earn a total of 3,031 from holding Select Fund A or generate 33.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Select Fund A vs. Europacific Growth Fund
Performance |
| Timeline |
| Select Fund A |
| Europacific Growth |
Select Fund and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Fund and Europacific Growth
The main advantage of trading using opposite Select Fund and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Fund position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| Select Fund vs. Europacific Growth Fund | Select Fund vs. Washington Mutual Investors | Select Fund vs. Capital World Growth | Select Fund vs. HUMANA INC |
| Europacific Growth vs. Growth Fund Of | Europacific Growth vs. Vanguard Institutional Index | Europacific Growth vs. Vanguard Mid Cap Index | Europacific Growth vs. Washington Mutual Investors |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |