Correlation Between Europac Gold and Intech Us

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

By analyzing existing cross correlation between Europac Gold Fund and Intech Managed Volatility, you can compare the effects of market volatilities on Europac Gold and Intech 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 Europac Gold with a short position of Intech Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Intech Us.

Diversification Opportunities for Europac Gold and Intech Us

-0.15

Correlation Coefficient

Europac Gold  Intech Us

Good diversification

The 3 months correlation between Europac and Intech is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility and Europac Gold 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 Europac Gold Fund are associated (or correlated) with Intech Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of Europac Gold i.e., Europac Gold and Intech Us go up and down completely randomly.

Pair Corralation between Europac Gold and Intech Us

Assuming the 90 days horizon Europac Gold is expected to generate 1.61 times less return on investment than Intech Us. In addition to that, Europac Gold is 2.23 times more volatile than Intech Managed Volatility. It trades about 0.02 of its total potential returns per unit of risk. Intech Managed Volatility is currently generating about 0.08 per unit of volatility. If you would invest  861.00  in Intech Managed Volatility on October 9, 2024 and sell it today you would earn a total of  307.00  from holding Intech Managed Volatility or generate 35.66% return on investment over 90 days.

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

Europac Gold Fund  vs.  Intech Managed Volatility

Europac Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intech Managed Volatility

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Europac Gold and Intech Us

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

The idea behind Europac Gold Fund and Intech Managed Volatility 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.