Correlation Between Scharf Global and Investment Grade
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Investment Grade 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 Investment Grade 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 Investment Grade Porate, you can compare the effects of market volatilities on Scharf Global and Investment Grade 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 Investment Grade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Investment Grade.
Diversification Opportunities for Scharf Global and Investment Grade
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scharf and Investment is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Investment Grade Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Grade Porate 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 Investment Grade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Grade Porate has no effect on the direction of Scharf Global i.e., Scharf Global and Investment Grade go up and down completely randomly.
Pair Corralation between Scharf Global and Investment Grade
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 1.73 times more return on investment than Investment Grade. However, Scharf Global is 1.73 times more volatile than Investment Grade Porate. It trades about 0.22 of its potential returns per unit of risk. Investment Grade Porate is currently generating about 0.08 per unit of risk. If you would invest 3,688 in Scharf Global Opportunity on August 28, 2024 and sell it today you would earn a total of 118.00 from holding Scharf Global Opportunity or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Investment Grade Porate
Performance |
| Timeline |
| Scharf Global Opportunity |
| Investment Grade Porate |
Scharf Global and Investment Grade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Investment Grade
The main advantage of trading using opposite Scharf Global and Investment Grade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Investment Grade 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 Investment Grade will offset losses from the drop in Investment Grade's long position.| Scharf Global vs. Materials Portfolio Fidelity | Scharf Global vs. Rational Special Situations | Scharf Global vs. Multimedia Portfolio Multimedia | Scharf Global vs. Morgan Stanley Institutional |
| Investment Grade vs. Pimco Rae Worldwide | Investment Grade vs. Pimco Rae Worldwide | Investment Grade vs. Pimco Rae Worldwide | Investment Grade vs. Pimco Rae Worldwide |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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