Correlation Between Applied Finance and Bull Profund
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Bull Profund 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 Applied Finance and Bull Profund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Bull Profund Bull, you can compare the effects of market volatilities on Applied Finance and Bull Profund 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 Applied Finance with a short position of Bull Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Bull Profund.
Diversification Opportunities for Applied Finance and Bull Profund
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Bull is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Bull Profund Bull in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bull Profund Bull and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Bull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bull Profund Bull has no effect on the direction of Applied Finance i.e., Applied Finance and Bull Profund go up and down completely randomly.
Pair Corralation between Applied Finance and Bull Profund
Assuming the 90 days horizon Applied Finance is expected to generate 1.21 times less return on investment than Bull Profund. In addition to that, Applied Finance is 1.45 times more volatile than Bull Profund Bull. It trades about 0.05 of its total potential returns per unit of risk. Bull Profund Bull is currently generating about 0.09 per unit of volatility. If you would invest 3,845 in Bull Profund Bull on December 5, 2024 and sell it today you would earn a total of 1,532 from holding Bull Profund Bull or generate 39.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Applied Finance Explorer vs. Bull Profund Bull
Performance |
Timeline |
Applied Finance Explorer |
Bull Profund Bull |
Applied Finance and Bull Profund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Finance and Bull Profund
The main advantage of trading using opposite Applied Finance and Bull Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Bull Profund 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 Bull Profund will offset losses from the drop in Bull Profund's long position.Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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