Correlation Between Growth Fund and Focused International
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Focused International 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 Growth Fund and Focused International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Investor and Focused International Growth, you can compare the effects of market volatilities on Growth Fund and Focused International 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 Growth Fund with a short position of Focused International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Focused International.
Diversification Opportunities for Growth Fund and Focused International
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Growth and Focused is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Investor and Focused International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focused International and Growth 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 Growth Fund Investor are associated (or correlated) with Focused International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focused International has no effect on the direction of Growth Fund i.e., Growth Fund and Focused International go up and down completely randomly.
Pair Corralation between Growth Fund and Focused International
Assuming the 90 days horizon Growth Fund Investor is expected to generate 1.38 times more return on investment than Focused International. However, Growth Fund is 1.38 times more volatile than Focused International Growth. It trades about 0.08 of its potential returns per unit of risk. Focused International Growth is currently generating about -0.18 per unit of risk. If you would invest 5,916 in Growth Fund Investor on August 26, 2024 and sell it today you would earn a total of 115.00 from holding Growth Fund Investor or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Investor vs. Focused International Growth
Performance |
| Timeline |
| Growth Fund Investor |
| Focused International |
Growth Fund and Focused International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Focused International
The main advantage of trading using opposite Growth Fund and Focused International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Focused International 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 Focused International will offset losses from the drop in Focused International's long position.| Growth Fund vs. International Growth Fund | Growth Fund vs. Heritage Fund Investor | Growth Fund vs. Janus Global Research |
| Focused International vs. Value Fund Investor | Focused International vs. Ultra Fund Investor | Focused International vs. Growth Fund Investor | Focused International vs. Select Fund Investor |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |