Correlation Between Ivy Advantus and Eic Value

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

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

Diversification Opportunities for Ivy Advantus and Eic Value

0.68

Correlation Coefficient

Ivy Advantus  Eic Value

Poor diversification

The 3 months correlation between Ivy and Eic is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Advantus Real and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Ivy Advantus 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 Ivy Advantus Real are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Ivy Advantus i.e., Ivy Advantus and Eic Value go up and down completely randomly.

Pair Corralation between Ivy Advantus and Eic Value

Assuming the 90 days horizon Ivy Advantus is expected to generate 3.06 times less return on investment than Eic Value. In addition to that, Ivy Advantus is 1.64 times more volatile than Eic Value Fund. It trades about 0.01 of its total potential returns per unit of risk. Eic Value Fund is currently generating about 0.06 per unit of volatility. If you would invest  1,377  in Eic Value Fund on September 29, 2024 and sell it today you would earn a total of  309.00  from holding Eic Value Fund or generate 22.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Ivy Advantus Real  vs.  Eic Value Fund

Ivy Advantus Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Advantus Real 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ivy Advantus and Eic Value

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

The idea behind Ivy Advantus Real and Eic 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.