Correlation Between Leuthold Global and Grizzly Short

Can any of the company-specific risk be diversified away by investing in both Leuthold Global and Grizzly Short 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 Leuthold Global and Grizzly Short into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Leuthold Global and Grizzly Short

0.8

Correlation Coefficient

Leuthold Global  Grizzly Short

Very poor diversification

The 3 months correlation between Leuthold and Grizzly is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Leuthold Global Fund and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short and Leuthold Global 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 Leuthold Global Fund are associated (or correlated) with Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Leuthold Global i.e., Leuthold Global and Grizzly Short go up and down completely randomly.

Pair Corralation between Leuthold Global and Grizzly Short

Assuming the 90 days horizon Leuthold Global Fund is expected to generate 0.75 times more return on investment than Grizzly Short. However, Leuthold Global Fund is 1.34 times less risky than Grizzly Short. It trades about -0.02 of its potential returns per unit of risk. Grizzly Short Fund is currently generating about -0.06 per unit of risk. If you would invest  939.00  in Leuthold Global Fund on September 17, 2024 and sell it today you would lose (37.00) from holding Leuthold Global Fund or give up 3.94% of portfolio value over 90 days.

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

Leuthold Global Fund  vs.  Grizzly Short Fund

Leuthold Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leuthold Global Fund 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.

Grizzly Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grizzly Short Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Leuthold Global and Grizzly Short

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

The idea behind Leuthold Global Fund and Grizzly Short Fund 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.