Correlation Between Scharf Global and Bright Rock
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Bright Rock 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 Scharf Global and Bright Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Bright Rock Mid, you can compare the effects of market volatilities on Scharf Global and Bright Rock 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 Scharf Global with a short position of Bright Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Bright Rock.
Diversification Opportunities for Scharf Global and Bright Rock
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Bright is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Bright Rock Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Rock Mid and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Bright Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Rock Mid has no effect on the direction of Scharf Global i.e., Scharf Global and Bright Rock go up and down completely randomly.
Pair Corralation between Scharf Global and Bright Rock
Assuming the 90 days horizon Scharf Global Opportunity is expected to under-perform the Bright Rock. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Global Opportunity is 1.42 times less risky than Bright Rock. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Bright Rock Mid is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,709 in Bright Rock Mid on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Bright Rock Mid or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Bright Rock Mid
Performance |
| Timeline |
| Scharf Global Opportunity |
| Bright Rock Mid |
Scharf Global and Bright Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Bright Rock
The main advantage of trading using opposite Scharf Global and Bright Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Bright Rock 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 Bright Rock will offset losses from the drop in Bright Rock's long position.| Scharf Global vs. Invesco Energy Fund | Scharf Global vs. Goehring Rozencwajg Resources | Scharf Global vs. Oil Gas Ultrasector | Scharf Global vs. Jennison Natural Resources |
| Bright Rock vs. Artisan Global Unconstrained | Bright Rock vs. Siit Global Managed | Bright Rock vs. Commonwealth Global Fund | Bright Rock vs. Morningstar Global Income |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |