Correlation Between Eic Value and Qs Us

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

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

Diversification Opportunities for Eic Value and Qs Us

-0.22

Correlation Coefficient

Eic Value  Qs Us

Very good diversification

The 3 months correlation between Eic and LMTIX is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Qs Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Large Cap and Eic Value 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 Eic Value Fund are associated (or correlated) with Qs Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Large Cap has no effect on the direction of Eic Value i.e., Eic Value and Qs Us go up and down completely randomly.

Pair Corralation between Eic Value and Qs Us

Assuming the 90 days horizon Eic Value Fund is expected to generate 0.66 times more return on investment than Qs Us. However, Eic Value Fund is 1.51 times less risky than Qs Us. It trades about 0.2 of its potential returns per unit of risk. Qs Large Cap is currently generating about -0.1 per unit of risk. If you would invest  1,601  in Eic Value Fund on December 19, 2024 and sell it today you would earn a total of  135.00  from holding Eic Value Fund or generate 8.43% return on investment over 90 days.

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

Eic Value Fund  vs.  Qs Large Cap

Eic Value Fund

Risk-Adjusted Performance

Good

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

Qs Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qs Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Eic Value and Qs Us

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

The idea behind Eic Value Fund and Qs Large Cap 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.