Correlation Between Integrity Growth and Heartland Value

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

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

Diversification Opportunities for Integrity Growth and Heartland Value

0.61

Correlation Coefficient

Integrity Growth  Heartland Value

Poor diversification

The 3 months correlation between Integrity and Heartland is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Integrity Growth Income and Heartland Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Value and Integrity Growth 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 Integrity Growth Income are associated (or correlated) with Heartland Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Value has no effect on the direction of Integrity Growth i.e., Integrity Growth and Heartland Value go up and down completely randomly.

Pair Corralation between Integrity Growth and Heartland Value

Assuming the 90 days horizon Integrity Growth Income is expected to generate 0.83 times more return on investment than Heartland Value. However, Integrity Growth Income is 1.21 times less risky than Heartland Value. It trades about -0.01 of its potential returns per unit of risk. Heartland Value Fund is currently generating about -0.11 per unit of risk. If you would invest  10,293  in Integrity Growth Income on December 2, 2024 and sell it today you would lose (25.00) from holding Integrity Growth Income or give up 0.24% of portfolio value over 90 days.

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

Integrity Growth Income  vs.  Heartland Value Fund

Integrity Growth Income

Risk-Adjusted Performance

Very Weak

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

Heartland Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heartland Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Integrity Growth and Heartland Value

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

The idea behind Integrity Growth Income and Heartland Value 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.