Correlation Between Ishares Msci and Scharf Fund

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

By analyzing existing cross correlation between Ishares Msci Eafe and Scharf Fund Retail, you can compare the effects of market volatilities on Ishares Msci and Scharf 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 Ishares Msci with a short position of Scharf Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Msci and Scharf Fund.

Diversification Opportunities for Ishares Msci and Scharf Fund

-0.53

Correlation Coefficient

Ishares Msci  Scharf Fund

Excellent diversification

The 3 months correlation between Ishares and Scharf is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Msci Eafe and Scharf Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Fund Retail and Ishares Msci 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 Ishares Msci Eafe are associated (or correlated) with Scharf Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Fund Retail has no effect on the direction of Ishares Msci i.e., Ishares Msci and Scharf Fund go up and down completely randomly.

Pair Corralation between Ishares Msci and Scharf Fund

Assuming the 90 days horizon Ishares Msci Eafe is expected to under-perform the Scharf Fund. In addition to that, Ishares Msci is 1.42 times more volatile than Scharf Fund Retail. It trades about -0.08 of its total potential returns per unit of risk. Scharf Fund Retail is currently generating about 0.14 per unit of volatility. If you would invest  5,480  in Scharf Fund Retail on August 31, 2024 and sell it today you would earn a total of  277.00  from holding Scharf Fund Retail or generate 5.05% return on investment over 90 days.

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

Ishares Msci Eafe  vs.  Scharf Fund Retail

Ishares Msci Eafe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ishares Msci Eafe has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ishares Msci is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Scharf Fund Retail

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Fund Retail are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Scharf Fund is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ishares Msci and Scharf Fund

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

The idea behind Ishares Msci Eafe and Scharf Fund Retail 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.