Correlation Between Aristotle Funds and Scout Small
Can any of the company-specific risk be diversified away by investing in both Aristotle Funds and Scout Small 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 Aristotle Funds and Scout Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle Funds Series and Scout Small Cap, you can compare the effects of market volatilities on Aristotle Funds and Scout Small 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 Aristotle Funds with a short position of Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Scout Small.
Diversification Opportunities for Aristotle Funds and Scout Small
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aristotle and Scout is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap and Aristotle Funds 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 Aristotle Funds Series are associated (or correlated) with Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Scout Small go up and down completely randomly.
Pair Corralation between Aristotle Funds and Scout Small
Assuming the 90 days horizon Aristotle Funds Series is expected to under-perform the Scout Small. In addition to that, Aristotle Funds is 1.89 times more volatile than Scout Small Cap. It trades about -0.37 of its total potential returns per unit of risk. Scout Small Cap is currently generating about -0.26 per unit of volatility. If you would invest 3,488 in Scout Small Cap on September 25, 2024 and sell it today you would lose (191.00) from holding Scout Small Cap or give up 5.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aristotle Funds Series vs. Scout Small Cap
Performance |
Timeline |
Aristotle Funds Series |
Scout Small Cap |
Aristotle Funds and Scout Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aristotle Funds and Scout Small
The main advantage of trading using opposite Aristotle Funds and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Funds position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small's long position.Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle International Eq | Aristotle Funds vs. Aristotle Funds Series |
Scout Small vs. Investec Emerging Markets | Scout Small vs. Shelton Emerging Markets | Scout Small vs. Black Oak Emerging | Scout Small vs. Pnc Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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