Correlation Between Cornerstone Aggressive and Us Government
Can any of the company-specific risk be diversified away by investing in both Cornerstone Aggressive and Us Government 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 Cornerstone Aggressive and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Aggressive Fund and Us Government Securities, you can compare the effects of market volatilities on Cornerstone Aggressive and Us Government 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 Cornerstone Aggressive with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Aggressive and Us Government.
Diversification Opportunities for Cornerstone Aggressive and Us Government
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cornerstone and UGSDX is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Aggressive Fund and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Cornerstone Aggressive 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 Cornerstone Aggressive Fund are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Cornerstone Aggressive i.e., Cornerstone Aggressive and Us Government go up and down completely randomly.
Pair Corralation between Cornerstone Aggressive and Us Government
Assuming the 90 days horizon Cornerstone Aggressive Fund is expected to generate 3.88 times more return on investment than Us Government. However, Cornerstone Aggressive is 3.88 times more volatile than Us Government Securities. It trades about 0.1 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.11 per unit of risk. If you would invest 1,358 in Cornerstone Aggressive Fund on September 12, 2024 and sell it today you would earn a total of 218.00 from holding Cornerstone Aggressive Fund or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cornerstone Aggressive Fund vs. Us Government Securities
Performance |
| Timeline |
| Cornerstone Aggressive |
| Us Government Securities |
Cornerstone Aggressive and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornerstone Aggressive and Us Government
The main advantage of trading using opposite Cornerstone Aggressive and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Aggressive position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.The idea behind Cornerstone Aggressive Fund and Us Government Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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