Correlation Between Growth Fund and Wellington Shields

Can any of the company-specific risk be diversified away by investing in both Growth Fund and Wellington Shields 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 Wellington Shields 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 Wellington Shields All Cap, you can compare the effects of market volatilities on Growth Fund and Wellington Shields 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 Wellington Shields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Wellington Shields.

Diversification Opportunities for Growth Fund and Wellington Shields

0.99

Correlation Coefficient

Growth Fund  Wellington Shields

No risk reduction

The 3 months correlation between Growth and Wellington is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Wellington Shields All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wellington Shields All 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 Wellington Shields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wellington Shields All has no effect on the direction of Growth Fund i.e., Growth Fund and Wellington Shields go up and down completely randomly.

Pair Corralation between Growth Fund and Wellington Shields

Assuming the 90 days horizon Growth Fund is expected to generate 1.07 times less return on investment than Wellington Shields. In addition to that, Growth Fund is 1.08 times more volatile than Wellington Shields All Cap. It trades about 0.22 of its total potential returns per unit of risk. Wellington Shields All Cap is currently generating about 0.25 per unit of volatility. If you would invest  2,653  in Wellington Shields All Cap on September 3, 2024 and sell it today you would earn a total of  358.00  from holding Wellington Shields All Cap or generate 13.49% return on investment over 90 days.

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

Growth Fund Of  vs.  Wellington Shields All Cap

Growth Fund

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Of are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wellington Shields All

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wellington Shields All Cap are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Wellington Shields showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Growth Fund and Wellington Shields

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

The idea behind Growth Fund Of and Wellington Shields All 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.