Correlation Between Transamerica Large and Stralem Equity
Can any of the company-specific risk be diversified away by investing in both Transamerica Large and Stralem Equity 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 Transamerica Large and Stralem Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Large Cap and Stralem Equity Fund, you can compare the effects of market volatilities on Transamerica Large and Stralem Equity 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 Transamerica Large with a short position of Stralem Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Large and Stralem Equity.
Diversification Opportunities for Transamerica Large and Stralem Equity
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transamerica and Stralem is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Large Cap and Stralem Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stralem Equity and Transamerica Large 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 Transamerica Large Cap are associated (or correlated) with Stralem Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stralem Equity has no effect on the direction of Transamerica Large i.e., Transamerica Large and Stralem Equity go up and down completely randomly.
Pair Corralation between Transamerica Large and Stralem Equity
Assuming the 90 days horizon Transamerica Large Cap is expected to generate 0.74 times more return on investment than Stralem Equity. However, Transamerica Large Cap is 1.36 times less risky than Stralem Equity. It trades about -0.2 of its potential returns per unit of risk. Stralem Equity Fund is currently generating about -0.18 per unit of risk. If you would invest 1,562 in Transamerica Large Cap on September 12, 2024 and sell it today you would lose (28.00) from holding Transamerica Large Cap or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Transamerica Large Cap vs. Stralem Equity Fund
Performance |
| Timeline |
| Transamerica Large Cap |
| Stralem Equity |
Transamerica Large and Stralem Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Large and Stralem Equity
The main advantage of trading using opposite Transamerica Large and Stralem Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Large position performs unexpectedly, Stralem Equity 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 Stralem Equity will offset losses from the drop in Stralem Equity's long position.| Transamerica Large vs. Vanguard Value Index | Transamerica Large vs. Dodge Cox Stock | Transamerica Large vs. American Mutual Fund | Transamerica Large vs. American Funds American |
| Stralem Equity vs. Fidelity Series 1000 | Stralem Equity vs. Virtus Nfj Large Cap | Stralem Equity vs. Qs Large Cap | Stralem Equity vs. Large Cap Growth Profund |
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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