Correlation Between 361 Global and Growth Income

Can any of the company-specific risk be diversified away by investing in both 361 Global and Growth Income 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 361 Global and Growth Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 361 Global Longshort and Growth Income Fund, you can compare the effects of market volatilities on 361 Global and Growth Income 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 361 Global with a short position of Growth Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Global and Growth Income.

Diversification Opportunities for 361 Global and Growth Income

0.49

Correlation Coefficient

361 Global  Growth Income

Very weak diversification

The 3 months correlation between 361 and Growth is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding 361 Global Longshort and Growth Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Income and 361 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 361 Global Longshort are associated (or correlated) with Growth Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Income has no effect on the direction of 361 Global i.e., 361 Global and Growth Income go up and down completely randomly.

Pair Corralation between 361 Global and Growth Income

Assuming the 90 days horizon 361 Global Longshort is expected to under-perform the Growth Income. But the mutual fund apears to be less risky and, when comparing its historical volatility, 361 Global Longshort is 1.47 times less risky than Growth Income. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Growth Income Fund is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,491  in Growth Income Fund on December 5, 2024 and sell it today you would lose (114.00) from holding Growth Income Fund or give up 4.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

361 Global Longshort  vs.  Growth Income Fund

361 Global Longshort

Risk-Adjusted Performance

Very Weak

Over the last 90 days 361 Global Longshort has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Growth Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Growth Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with 361 Global and Growth Income

The main advantage of trading using opposite 361 Global and Growth Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Global position performs unexpectedly, Growth Income 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 Growth Income will offset losses from the drop in Growth Income's long position.

The idea behind 361 Global Longshort and Growth Income Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.