Correlation Between Scharf Global and Cornerstone Aggressive
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Cornerstone Aggressive 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 Cornerstone Aggressive 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 Cornerstone Aggressive Fund, you can compare the effects of market volatilities on Scharf Global and Cornerstone Aggressive 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 Cornerstone Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Cornerstone Aggressive.
Diversification Opportunities for Scharf Global and Cornerstone Aggressive
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scharf and Cornerstone is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Cornerstone Aggressive Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Aggressive 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 Cornerstone Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Aggressive has no effect on the direction of Scharf Global i.e., Scharf Global and Cornerstone Aggressive go up and down completely randomly.
Pair Corralation between Scharf Global and Cornerstone Aggressive
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 1.14 times more return on investment than Cornerstone Aggressive. However, Scharf Global is 1.14 times more volatile than Cornerstone Aggressive Fund. It trades about 0.42 of its potential returns per unit of risk. Cornerstone Aggressive Fund is currently generating about 0.24 per unit of risk. If you would invest 3,640 in Scharf Global Opportunity on September 2, 2024 and sell it today you would earn a total of 189.00 from holding Scharf Global Opportunity or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Cornerstone Aggressive Fund
Performance |
| Timeline |
| Scharf Global Opportunity |
| Cornerstone Aggressive |
Scharf Global and Cornerstone Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Cornerstone Aggressive
The main advantage of trading using opposite Scharf Global and Cornerstone Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Cornerstone Aggressive 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 Cornerstone Aggressive will offset losses from the drop in Cornerstone Aggressive's long position.| Scharf Global vs. Scharf Balanced Opportunity | Scharf Global vs. Scharf Fund Retail | Scharf Global vs. Scharf Balanced Opportunity | Scharf Global vs. Virtus Allianzgi Artificial |
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 Stocks Directory module to find actively traded stocks across global markets.
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