Correlation Between Select Fund and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Select 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 Select 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 Select Fund I and Growth Fund C, you can compare the effects of market volatilities on Select 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 Select Fund with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Growth Fund.
Diversification Opportunities for Select Fund and Growth Fund
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Select and Growth is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund I 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 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 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 Select Fund i.e., Select Fund and Growth Fund go up and down completely randomly.
Pair Corralation between Select Fund and Growth Fund
Assuming the 90 days horizon Select Fund I is expected to generate 1.0 times more return on investment than Growth Fund. However, Select Fund I is 1.0 times less risky than Growth Fund. It trades about 0.07 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 11,226 in Select Fund I on August 27, 2024 and sell it today you would earn a total of 1,700 from holding Select Fund I or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Fund I vs. Growth Fund C
Performance |
| Timeline |
| Select Fund I |
| Growth Fund C |
Select Fund and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Fund and Growth Fund
The main advantage of trading using opposite Select Fund and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select 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.| Select Fund vs. Ultra Fund I | Select Fund vs. International Growth Fund | Select Fund vs. Ultra Fund A | Select Fund vs. Value Fund I |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |