Correlation Between Intech Managed and Perkins Small

Can any of the company-specific risk be diversified away by investing in both Intech Managed and Perkins Small 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 Intech Managed and Perkins Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intech Managed Volatility and Perkins Small Cap, you can compare the effects of market volatilities on Intech Managed and Perkins Small 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 Intech Managed with a short position of Perkins Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intech Managed and Perkins Small.

Diversification Opportunities for Intech Managed and Perkins Small

0.86

Correlation Coefficient

Intech Managed  Perkins Small

Very poor diversification

The 3 months correlation between Intech and Perkins is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Intech Managed Volatility and Perkins Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Small Cap and Intech Managed 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 Intech Managed Volatility are associated (or correlated) with Perkins Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Small Cap has no effect on the direction of Intech Managed i.e., Intech Managed and Perkins Small go up and down completely randomly.

Pair Corralation between Intech Managed and Perkins Small

Assuming the 90 days horizon Intech Managed Volatility is expected to generate 0.45 times more return on investment than Perkins Small. However, Intech Managed Volatility is 2.2 times less risky than Perkins Small. It trades about 0.07 of its potential returns per unit of risk. Perkins Small Cap is currently generating about -0.02 per unit of risk. If you would invest  1,150  in Intech Managed Volatility on September 13, 2024 and sell it today you would earn a total of  41.00  from holding Intech Managed Volatility or generate 3.57% return on investment over 90 days.

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

Intech Managed Volatility  vs.  Perkins Small Cap

Intech Managed Volatility

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intech Managed Volatility are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intech Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Perkins Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Intech Managed and Perkins Small

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

The idea behind Intech Managed Volatility and Perkins Small 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.