Correlation Between Dynamic Global and Edgepoint Global

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

By analyzing existing cross correlation between Dynamic Global Fixed and Edgepoint Global Growth, you can compare the effects of market volatilities on Dynamic Global and Edgepoint Global 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 Dynamic Global with a short position of Edgepoint Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Global and Edgepoint Global.

Diversification Opportunities for Dynamic Global and Edgepoint Global

0.41

Correlation Coefficient

Dynamic Global  Edgepoint Global

Very weak diversification

The 3 months correlation between Dynamic and Edgepoint is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Global Fixed and Edgepoint Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Global Growth and Dynamic Global 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 Dynamic Global Fixed are associated (or correlated) with Edgepoint Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Global Growth has no effect on the direction of Dynamic Global i.e., Dynamic Global and Edgepoint Global go up and down completely randomly.

Pair Corralation between Dynamic Global and Edgepoint Global

Assuming the 90 days trading horizon Dynamic Global Fixed is expected to generate 0.63 times more return on investment than Edgepoint Global. However, Dynamic Global Fixed is 1.58 times less risky than Edgepoint Global. It trades about 0.02 of its potential returns per unit of risk. Edgepoint Global Growth is currently generating about -0.05 per unit of risk. If you would invest  1,998  in Dynamic Global Fixed on October 10, 2024 and sell it today you would earn a total of  5.00  from holding Dynamic Global Fixed or generate 0.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	59.32%
Values	Daily Returns

Dynamic Global Fixed  vs.  Edgepoint Global Growth

Dynamic Global Fixed

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Global Fixed are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Dynamic Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Edgepoint Global Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Edgepoint Global Growth has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady forward-looking indicators, Edgepoint Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Dynamic Global and Edgepoint Global

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

The idea behind Dynamic Global Fixed and Edgepoint Global Growth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.