Correlation Between Chase Growth and Dimensional 2030

Can any of the company-specific risk be diversified away by investing in both Chase Growth and Dimensional 2030 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 Chase Growth and Dimensional 2030 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chase Growth Fund and Dimensional 2030 Target, you can compare the effects of market volatilities on Chase Growth and Dimensional 2030 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 Chase Growth with a short position of Dimensional 2030. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and Dimensional 2030.

Diversification Opportunities for Chase Growth and Dimensional 2030

-0.25

Correlation Coefficient

Chase Growth  Dimensional 2030

Very good diversification

The 3 months correlation between Chase and Dimensional is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and Dimensional 2030 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional 2030 Target and Chase Growth 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 Chase Growth Fund are associated (or correlated) with Dimensional 2030. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional 2030 Target has no effect on the direction of Chase Growth i.e., Chase Growth and Dimensional 2030 go up and down completely randomly.

Pair Corralation between Chase Growth and Dimensional 2030

Assuming the 90 days horizon Chase Growth Fund is expected to under-perform the Dimensional 2030. In addition to that, Chase Growth is 4.9 times more volatile than Dimensional 2030 Target. It trades about -0.03 of its total potential returns per unit of risk. Dimensional 2030 Target is currently generating about -0.03 per unit of volatility. If you would invest  1,271  in Dimensional 2030 Target on September 13, 2024 and sell it today you would lose (13.00) from holding Dimensional 2030 Target or give up 1.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Chase Growth Fund  vs.  Dimensional 2030 Target

Chase Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dimensional 2030 Target

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional 2030 Target has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dimensional 2030 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chase Growth and Dimensional 2030

The main advantage of trading using opposite Chase Growth and Dimensional 2030 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase Growth position performs unexpectedly, Dimensional 2030 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 Dimensional 2030 will offset losses from the drop in Dimensional 2030's long position.

The idea behind Chase Growth Fund and Dimensional 2030 Target 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.