Correlation Between Curasset Capital and Banking Fund

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

By analyzing existing cross correlation between Curasset Capital Management and Banking Fund Investor, you can compare the effects of market volatilities on Curasset Capital and Banking 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 Curasset Capital with a short position of Banking Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curasset Capital and Banking Fund.

Diversification Opportunities for Curasset Capital and Banking Fund

-0.18

Correlation Coefficient

Curasset Capital  Banking Fund

Good diversification

The 3 months correlation between Curasset and Banking is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Curasset Capital Management and Banking Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banking Fund Investor and Curasset Capital 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 Curasset Capital Management are associated (or correlated) with Banking Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banking Fund Investor has no effect on the direction of Curasset Capital i.e., Curasset Capital and Banking Fund go up and down completely randomly.

Pair Corralation between Curasset Capital and Banking Fund

Assuming the 90 days horizon Curasset Capital Management is expected to under-perform the Banking Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Curasset Capital Management is 6.82 times less risky than Banking Fund. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Banking Fund Investor is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10,200  in Banking Fund Investor on October 6, 2024 and sell it today you would earn a total of  3.00  from holding Banking Fund Investor or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Curasset Capital Management  vs.  Banking Fund Investor

Curasset Capital Man

Risk-Adjusted Performance

0 of 100

Very Weak

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

Banking Fund Investor

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banking Fund Investor are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Banking Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Curasset Capital and Banking Fund

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

The idea behind Curasset Capital Management and Banking Fund Investor 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.