Correlation Between Value Fund and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Value Fund and Strategic Asset 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 Value Fund and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Fund Investor and Strategic Asset Management, you can compare the effects of market volatilities on Value Fund and Strategic Asset 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 Value Fund with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Strategic Asset.
Diversification Opportunities for Value Fund and Strategic Asset
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Value and Strategic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Investor and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana and Value 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 Value Fund Investor are associated (or correlated) with Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Value Fund i.e., Value Fund and Strategic Asset go up and down completely randomly.
Pair Corralation between Value Fund and Strategic Asset
Assuming the 90 days horizon Value Fund is expected to generate 1.63 times less return on investment than Strategic Asset. In addition to that, Value Fund is 1.42 times more volatile than Strategic Asset Management. It trades about 0.05 of its total potential returns per unit of risk. Strategic Asset Management is currently generating about 0.11 per unit of volatility. If you would invest 1,288 in Strategic Asset Management on September 12, 2024 and sell it today you would earn a total of 412.00 from holding Strategic Asset Management or generate 31.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.18% |
| Values | Daily Returns |
Value Fund Investor vs. Strategic Asset Management
Performance |
| Timeline |
| Value Fund Investor |
| Strategic Asset Mana |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Value Fund and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Fund and Strategic Asset
The main advantage of trading using opposite Value Fund and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Fund position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Value Fund vs. International Growth Fund | Value Fund vs. Growth Fund Investor | Value Fund vs. Equity Income Fund | Value Fund vs. Ultra Fund Investor |
| Strategic Asset vs. Strategic Allocation Servative | Strategic Asset vs. Strategic Allocation Aggressive | Strategic Asset vs. Value Fund Investor | Strategic Asset vs. International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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