Correlation Between Select Fund and Focused International
Can any of the company-specific risk be diversified away by investing in both Select 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 Select 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 Select Fund I and Focused International Growth, you can compare the effects of market volatilities on Select 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 Select Fund with a short position of Focused International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Focused International.
Diversification Opportunities for Select Fund and Focused International
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Select and Focused is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund I and Focused International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focused International 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 I 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 Select Fund i.e., Select Fund and Focused International go up and down completely randomly.
Pair Corralation between Select Fund and Focused International
Assuming the 90 days horizon Select Fund I is expected to under-perform the Focused International. In addition to that, Select Fund is 1.32 times more volatile than Focused International Growth. It trades about -0.08 of its total potential returns per unit of risk. Focused International Growth is currently generating about 0.08 per unit of volatility. If you would invest 1,699 in Focused International Growth on November 28, 2024 and sell it today you would earn a total of 20.00 from holding Focused International Growth or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Fund I vs. Focused International Growth
Performance |
| Timeline |
| Select Fund I |
| Focused International |
Select Fund and Focused International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Fund and Focused International
The main advantage of trading using opposite Select Fund and Focused International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select 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.| Select Fund vs. Ultra Fund I | Select Fund vs. International Growth Fund | Select Fund vs. Ultra Fund A | Select Fund vs. Value Fund I |
| Focused International vs. Hartford Moderate Allocation | Focused International vs. Enhanced Large Pany | Focused International vs. Upright Assets Allocation | Focused International vs. Dodge Cox Stock |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Transaction History View history of all your transactions and understand their impact on performance |