Correlation Between Global Managed and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Global Managed and Aggressive 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 Global Managed and Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Managed Volatility and Aggressive Growth Fund, you can compare the effects of market volatilities on Global Managed and Aggressive 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 Global Managed with a short position of Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Managed and Aggressive Growth.
Diversification Opportunities for Global Managed and Aggressive Growth
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Aggressive is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global Managed Volatility and Aggressive Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Global Managed 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 Global Managed Volatility are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Global Managed i.e., Global Managed and Aggressive Growth go up and down completely randomly.
Pair Corralation between Global Managed and Aggressive Growth
Assuming the 90 days horizon Global Managed is expected to generate 1.88 times less return on investment than Aggressive Growth. But when comparing it to its historical volatility, Global Managed Volatility is 2.11 times less risky than Aggressive Growth. It trades about 0.11 of its potential returns per unit of risk. Aggressive Growth Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,950 in Aggressive Growth Fund on August 31, 2024 and sell it today you would earn a total of 175.00 from holding Aggressive Growth Fund or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Managed Volatility vs. Aggressive Growth Fund
Performance |
| Timeline |
| Global Managed Volatility |
| Aggressive Growth |
Global Managed and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Managed and Aggressive Growth
The main advantage of trading using opposite Global Managed and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Managed position performs unexpectedly, Aggressive 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| Global Managed vs. Janus Trarian Fund | Global Managed vs. Janus Research Fund | Global Managed vs. Janus Enterprise Fund | Global Managed vs. Janus Global Technology |
| Aggressive Growth vs. Mirova Global Green | Aggressive Growth vs. Morgan Stanley Global | Aggressive Growth vs. Federated Global Allocation | Aggressive Growth vs. T Rowe Price |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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