Correlation Between Ambassador Fund and Bogle Small

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

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

Diversification Opportunities for Ambassador Fund and Bogle Small

-0.49

Correlation Coefficient

Ambassador Fund  Bogle Small

Very good diversification

The 3 months correlation between Ambassador and Bogle is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ambassador Fund and Bogle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bogle Small Cap and Ambassador Fund 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 Ambassador Fund are associated (or correlated) with Bogle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bogle Small Cap has no effect on the direction of Ambassador Fund i.e., Ambassador Fund and Bogle Small go up and down completely randomly.

Pair Corralation between Ambassador Fund and Bogle Small

Assuming the 90 days horizon Ambassador Fund is expected to generate 0.09 times more return on investment than Bogle Small. However, Ambassador Fund is 11.4 times less risky than Bogle Small. It trades about 0.14 of its potential returns per unit of risk. Bogle Small Cap is currently generating about -0.09 per unit of risk. If you would invest  995.00  in Ambassador Fund on December 23, 2024 and sell it today you would earn a total of  9.00  from holding Ambassador Fund or generate 0.9% return on investment over 90 days.

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

Ambassador Fund  vs.  Bogle Small Cap

Ambassador Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ambassador Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ambassador Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bogle Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bogle Small 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 Ambassador Fund and Bogle Small

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

The idea behind Ambassador Fund and Bogle Small 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.