Correlation Between Select Fund and International Growth
Can any of the company-specific risk be diversified away by investing in both Select Fund and International Growth 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 International Growth 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 International Growth Fund, you can compare the effects of market volatilities on Select Fund and International Growth 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 International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and International Growth.
Diversification Opportunities for Select Fund and International Growth
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Select and International is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund I and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth 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 International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Select Fund i.e., Select Fund and International Growth go up and down completely randomly.
Pair Corralation between Select Fund and International Growth
Assuming the 90 days horizon Select Fund I is expected to generate 1.24 times more return on investment than International Growth. However, Select Fund is 1.24 times more volatile than International Growth Fund. It trades about 0.07 of its potential returns per unit of risk. International Growth Fund is currently generating about 0.04 per unit of risk. If you would invest 8,963 in Select Fund I on August 30, 2024 and sell it today you would earn a total of 4,031 from holding Select Fund I or generate 44.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Fund I vs. International Growth Fund
Performance |
| Timeline |
| Select Fund I |
| International Growth |
Select Fund and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Fund and International Growth
The main advantage of trading using opposite Select Fund and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Fund position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth'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 |
| International Growth vs. Europacific Growth Fund | International Growth vs. Europacific Growth Fund | International Growth vs. Europacific Growth Fund | International Growth vs. Europacific 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |