Correlation Between International Growth and Utilities Fund
Can any of the company-specific risk be diversified away by investing in both International Growth and Utilities 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 International Growth and Utilities Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Growth Fund and Utilities Fund Investor, you can compare the effects of market volatilities on International Growth and Utilities 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 International Growth with a short position of Utilities Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Growth and Utilities Fund.
Diversification Opportunities for International Growth and Utilities Fund
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Utilities is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding International Growth Fund and Utilities Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Investor and International Growth 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 International Growth Fund are associated (or correlated) with Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Investor has no effect on the direction of International Growth i.e., International Growth and Utilities Fund go up and down completely randomly.
Pair Corralation between International Growth and Utilities Fund
Assuming the 90 days horizon International Growth is expected to generate 5.22 times less return on investment than Utilities Fund. But when comparing it to its historical volatility, International Growth Fund is 1.15 times less risky than Utilities Fund. It trades about 0.02 of its potential returns per unit of risk. Utilities Fund Investor is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,420 in Utilities Fund Investor on August 27, 2024 and sell it today you would earn a total of 481.00 from holding Utilities Fund Investor or generate 33.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Growth Fund vs. Utilities Fund Investor
Performance |
| Timeline |
| International Growth |
| Utilities Fund Investor |
International Growth and Utilities Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Growth and Utilities Fund
The main advantage of trading using opposite International Growth and Utilities Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Growth position performs unexpectedly, Utilities 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 Utilities Fund will offset losses from the drop in Utilities Fund's long position.| International Growth vs. Value Fund Investor | International Growth vs. Ultra Fund Investor | International Growth vs. Growth Fund Investor | International Growth vs. Income Growth Fund |
| Utilities Fund vs. Real Estate Fund | Utilities Fund vs. Emerging Markets Fund | Utilities Fund vs. Heritage Fund Investor | Utilities Fund vs. Global Gold 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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