Correlation Between Heritage Fund and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Heritage Fund and Growth 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 Heritage Fund and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Fund Investor and Growth Fund C, you can compare the effects of market volatilities on Heritage Fund and Growth 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 Heritage Fund with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Fund and Growth Fund.
Diversification Opportunities for Heritage Fund and Growth Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heritage and Growth is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Fund Investor and Growth Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund C and Heritage 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 Heritage Fund Investor are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund C has no effect on the direction of Heritage Fund i.e., Heritage Fund and Growth Fund go up and down completely randomly.
Pair Corralation between Heritage Fund and Growth Fund
Assuming the 90 days horizon Heritage Fund Investor is expected to generate 0.94 times more return on investment than Growth Fund. However, Heritage Fund Investor is 1.06 times less risky than Growth Fund. It trades about 0.1 of its potential returns per unit of risk. Growth Fund C is currently generating about 0.06 per unit of risk. If you would invest 2,394 in Heritage Fund Investor on August 27, 2024 and sell it today you would earn a total of 497.00 from holding Heritage Fund Investor or generate 20.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Fund Investor vs. Growth Fund C
Performance |
| Timeline |
| Heritage Fund Investor |
| Growth Fund C |
Heritage Fund and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Fund and Growth Fund
The main advantage of trading using opposite Heritage Fund and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Fund position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Heritage Fund vs. Growth Fund Investor | Heritage Fund vs. Select Fund Investor | Heritage Fund vs. Emerging Markets Fund | Heritage Fund vs. Ultra Fund Investor |
| Growth Fund vs. International Growth Fund | Growth Fund vs. Heritage Fund Investor | Growth Fund vs. Janus Global Research |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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