Correlation Between Value Fund and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Value Fund and Clipper 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 Value Fund and Clipper Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Fund Value and Clipper Fund Inc, you can compare the effects of market volatilities on Value Fund and Clipper 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 Value Fund with a short position of Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Clipper Fund.
Diversification Opportunities for Value Fund and Clipper Fund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Value and Clipper is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Value and Clipper Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Fund and Value Fund 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 Value Fund Value are associated (or correlated) with Clipper Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Fund has no effect on the direction of Value Fund i.e., Value Fund and Clipper Fund go up and down completely randomly.
Pair Corralation between Value Fund and Clipper Fund
Assuming the 90 days horizon Value Fund is expected to generate 2.03 times less return on investment than Clipper Fund. But when comparing it to its historical volatility, Value Fund Value is 1.21 times less risky than Clipper Fund. It trades about 0.08 of its potential returns per unit of risk. Clipper Fund Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 14,457 in Clipper Fund Inc on August 25, 2024 and sell it today you would earn a total of 867.00 from holding Clipper Fund Inc or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Fund Value vs. Clipper Fund Inc
Performance |
| Timeline |
| Value Fund Value |
| Clipper Fund |
Value Fund and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Fund and Clipper Fund
The main advantage of trading using opposite Value Fund and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Fund position performs unexpectedly, Clipper 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 Clipper Fund will offset losses from the drop in Clipper Fund's long position.| Value Fund vs. Partners Value Fund | Value Fund vs. Clipper Fund Inc | Value Fund vs. Longleaf Partners Fund | Value Fund vs. Third Avenue Value |
| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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