Correlation Between High Income and Growth Fund
Can any of the company-specific risk be diversified away by investing in both High Income 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 High Income and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Income Fund and Growth Fund Growth, you can compare the effects of market volatilities on High Income 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 High Income with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Income and Growth Fund.
Diversification Opportunities for High Income and Growth Fund
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between High and Growth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Income Fund and Growth Fund Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund Growth and High Income 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 High Income Fund 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 Growth has no effect on the direction of High Income i.e., High Income and Growth Fund go up and down completely randomly.
Pair Corralation between High Income and Growth Fund
Assuming the 90 days horizon High Income is expected to generate 2.94 times less return on investment than Growth Fund. But when comparing it to its historical volatility, High Income Fund is 7.19 times less risky than Growth Fund. It trades about 0.28 of its potential returns per unit of risk. Growth Fund Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,865 in Growth Fund Growth on November 8, 2024 and sell it today you would earn a total of 117.00 from holding Growth Fund Growth or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
High Income Fund vs. Growth Fund Growth
Performance |
| Timeline |
| High Income Fund |
| Growth Fund Growth |
High Income and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Income and Growth Fund
The main advantage of trading using opposite High Income and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Income 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.| High Income vs. The Hartford Healthcare | High Income vs. Highland Longshort Healthcare | High Income vs. Baillie Gifford Health | High Income vs. Eventide Healthcare Life |
| Growth Fund vs. Income Stock Fund | Growth Fund vs. Emerging Markets Fund | Growth Fund vs. International Fund International | Growth Fund vs. Small Cap Stock |
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.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |