Correlation Between Aegis Value and Schwartz Value

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

By analyzing existing cross correlation between Aegis Value Fund and Schwartz Value Focused, you can compare the effects of market volatilities on Aegis Value and Schwartz Value 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 Aegis Value with a short position of Schwartz Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegis Value and Schwartz Value.

Diversification Opportunities for Aegis Value and Schwartz Value

0.24

Correlation Coefficient

Aegis Value  Schwartz Value

Modest diversification

The 3 months correlation between Aegis and Schwartz is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aegis Value Fund and Schwartz Value Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwartz Value Focused and Aegis Value 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 Aegis Value Fund are associated (or correlated) with Schwartz Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwartz Value Focused has no effect on the direction of Aegis Value i.e., Aegis Value and Schwartz Value go up and down completely randomly.

Pair Corralation between Aegis Value and Schwartz Value

Assuming the 90 days horizon Aegis Value Fund is expected to generate 0.68 times more return on investment than Schwartz Value. However, Aegis Value Fund is 1.47 times less risky than Schwartz Value. It trades about -0.08 of its potential returns per unit of risk. Schwartz Value Focused is currently generating about -0.15 per unit of risk. If you would invest  4,072  in Aegis Value Fund on November 29, 2024 and sell it today you would lose (294.00) from holding Aegis Value Fund or give up 7.22% of portfolio value over 90 days.

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

Aegis Value Fund  vs.  Schwartz Value Focused

Aegis Value Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aegis Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Schwartz Value Focused

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schwartz Value Focused 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Aegis Value and Schwartz Value

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

The idea behind Aegis Value Fund and Schwartz Value Focused 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.