Correlation Between Aggressive Growth and International Fund
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth and International 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 Aggressive Growth and International Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Fund and International Fund International, you can compare the effects of market volatilities on Aggressive Growth and International 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 Aggressive Growth with a short position of International Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and International Fund.
Diversification Opportunities for Aggressive Growth and International Fund
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aggressive and International is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Fund and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund and Aggressive Growth 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 Aggressive Growth Fund are associated (or correlated) with International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and International Fund go up and down completely randomly.
Pair Corralation between Aggressive Growth and International Fund
Assuming the 90 days horizon Aggressive Growth Fund is expected to generate 1.47 times more return on investment than International Fund. However, Aggressive Growth is 1.47 times more volatile than International Fund International. It trades about 0.1 of its potential returns per unit of risk. International Fund International is currently generating about 0.05 per unit of risk. If you would invest 3,980 in Aggressive Growth Fund on November 2, 2024 and sell it today you would earn a total of 2,899 from holding Aggressive Growth Fund or generate 72.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Fund vs. International Fund Internation
Performance |
| Timeline |
| Aggressive Growth |
| International Fund |
Aggressive Growth and International Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and International Fund
The main advantage of trading using opposite Aggressive Growth and International Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth position performs unexpectedly, International 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 International Fund will offset losses from the drop in International Fund's long position.| Aggressive Growth vs. Us Global Investors | Aggressive Growth vs. Commonwealth Global Fund | Aggressive Growth vs. Rbc Global Equity | Aggressive Growth vs. Aqr Global Macro |
| International Fund vs. One Choice Portfolio | International Fund vs. Needham Aggressive Growth | International Fund vs. Aqr Risk Parity | International Fund vs. Siit High Yield |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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