Correlation Between Eic Value and Smead Funds
Can any of the company-specific risk be diversified away by investing in both Eic Value and Smead Funds 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 Smead Funds 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 Smead Funds Trust, you can compare the effects of market volatilities on Eic Value and Smead Funds 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 Smead Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Smead Funds.
Diversification Opportunities for Eic Value and Smead Funds
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eic and Smead is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Smead Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Funds Trust 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 Smead Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Funds Trust has no effect on the direction of Eic Value i.e., Eic Value and Smead Funds go up and down completely randomly.
Pair Corralation between Eic Value and Smead Funds
Assuming the 90 days horizon Eic Value is expected to generate 1.5 times less return on investment than Smead Funds. But when comparing it to its historical volatility, Eic Value Fund is 1.45 times less risky than Smead Funds. It trades about 0.17 of its potential returns per unit of risk. Smead Funds Trust is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,396 in Smead Funds Trust on December 27, 2024 and sell it today you would earn a total of 566.00 from holding Smead Funds Trust or generate 10.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Eic Value Fund vs. Smead Funds Trust
Performance |
Timeline |
Eic Value Fund |
Smead Funds Trust |
Eic Value and Smead Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eic Value and Smead Funds
The main advantage of trading using opposite Eic Value and Smead Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Smead Funds 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 Smead Funds will offset losses from the drop in Smead Funds' long position.Eic Value vs. Jp Morgan Smartretirement | Eic Value vs. Tax Managed International Equity | Eic Value vs. Versatile Bond Portfolio | Eic Value vs. Scharf Global Opportunity |
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Check out your portfolio center.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.
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