Correlation Between Select Fund and California Intermediate-ter
Can any of the company-specific risk be diversified away by investing in both Select Fund and California Intermediate-ter 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 California Intermediate-ter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Fund Investor and California Intermediate Term Tax Free, you can compare the effects of market volatilities on Select Fund and California Intermediate-ter 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 California Intermediate-ter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and California Intermediate-ter.
Diversification Opportunities for Select Fund and California Intermediate-ter
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Select and California is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund Investor and California Intermediate Term T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate-ter 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 Investor are associated (or correlated) with California Intermediate-ter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate-ter has no effect on the direction of Select Fund i.e., Select Fund and California Intermediate-ter go up and down completely randomly.
Pair Corralation between Select Fund and California Intermediate-ter
Assuming the 90 days horizon Select Fund Investor is expected to generate 4.41 times more return on investment than California Intermediate-ter. However, Select Fund is 4.41 times more volatile than California Intermediate Term Tax Free. It trades about 0.23 of its potential returns per unit of risk. California Intermediate Term Tax Free is currently generating about 0.21 per unit of risk. If you would invest 11,963 in Select Fund Investor on September 1, 2024 and sell it today you would earn a total of 548.00 from holding Select Fund Investor or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Select Fund Investor vs. California Intermediate Term T
Performance |
| Timeline |
| Select Fund Investor |
| California Intermediate-ter |
Select Fund and California Intermediate-ter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Fund and California Intermediate-ter
The main advantage of trading using opposite Select Fund and California Intermediate-ter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Fund position performs unexpectedly, California Intermediate-ter 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 California Intermediate-ter will offset losses from the drop in California Intermediate-ter's long position.| Select Fund vs. Growth Fund Investor | Select Fund vs. Ultra Fund Investor | Select Fund vs. Heritage Fund Investor | Select Fund vs. International Growth Fund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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