Correlation Between Cb Large and Growth Fund

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

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

Diversification Opportunities for Cb Large and Growth Fund

0.06

Correlation Coefficient

Cb Large  Growth Fund

Significant diversification

The 3 months correlation between CBLSX and Growth is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cb Large Cap and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Cb Large 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 Cb Large Cap are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Cb Large i.e., Cb Large and Growth Fund go up and down completely randomly.

Pair Corralation between Cb Large and Growth Fund

Assuming the 90 days horizon Cb Large Cap is expected to under-perform the Growth Fund. In addition to that, Cb Large is 8.94 times more volatile than Growth Fund Of. It trades about -0.22 of its total potential returns per unit of risk. Growth Fund Of is currently generating about 0.45 per unit of volatility. If you would invest  6,945  in Growth Fund Of on September 19, 2024 and sell it today you would earn a total of  404.00  from holding Growth Fund Of or generate 5.82% return on investment over 90 days.

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

Cb Large Cap  vs.  Growth Fund Of

Cb Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cb Large Cap 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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Growth Fund

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Of are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cb Large and Growth Fund

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

The idea behind Cb Large Cap and Growth Fund Of 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.