Correlation Between Growth Fund and Axs Thomson

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

By analyzing existing cross correlation between Growth Fund Of and Axs Thomson Reuters, you can compare the effects of market volatilities on Growth Fund and Axs Thomson 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 Growth Fund with a short position of Axs Thomson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Axs Thomson.

Diversification Opportunities for Growth Fund and Axs Thomson

0.71

Correlation Coefficient

Growth Fund  Axs Thomson

Poor diversification

The 3 months correlation between Growth and Axs is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Axs Thomson Reuters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axs Thomson Reuters and Growth 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 Growth Fund Of are associated (or correlated) with Axs Thomson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axs Thomson Reuters has no effect on the direction of Growth Fund i.e., Growth Fund and Axs Thomson go up and down completely randomly.

Pair Corralation between Growth Fund and Axs Thomson

Assuming the 90 days horizon Growth Fund Of is expected to under-perform the Axs Thomson. In addition to that, Growth Fund is 1.7 times more volatile than Axs Thomson Reuters. It trades about -0.11 of its total potential returns per unit of risk. Axs Thomson Reuters is currently generating about 0.0 per unit of volatility. If you would invest  2,642  in Axs Thomson Reuters on September 28, 2024 and sell it today you would lose (11.00) from holding Axs Thomson Reuters or give up 0.42% of portfolio value over 90 days.

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

Growth Fund Of  vs.  Axs Thomson Reuters

Growth Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Axs Thomson Reuters

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axs Thomson Reuters are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Axs Thomson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Growth Fund and Axs Thomson

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

The idea behind Growth Fund Of and Axs Thomson Reuters 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..