Correlation Between Intech Us and Perkins Select

Can any of the company-specific risk be diversified away by investing in both Intech Us and Perkins Select 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 Us and Perkins Select 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 Select Value, you can compare the effects of market volatilities on Intech Us and Perkins Select 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 Us with a short position of Perkins Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intech Us and Perkins Select.

Diversification Opportunities for Intech Us and Perkins Select

0.84

Correlation Coefficient

Intech Us  Perkins Select

Very poor diversification

The 3 months correlation between Intech and Perkins is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Intech Managed Volatility and Perkins Select Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Select Value and Intech Us 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Select Value has no effect on the direction of Intech Us i.e., Intech Us and Perkins Select go up and down completely randomly.

Pair Corralation between Intech Us and Perkins Select

Assuming the 90 days horizon Intech Managed Volatility is expected to generate 0.88 times more return on investment than Perkins Select. However, Intech Managed Volatility is 1.13 times less risky than Perkins Select. It trades about -0.06 of its potential returns per unit of risk. Perkins Select Value is currently generating about -0.12 per unit of risk. If you would invest  1,162  in Intech Managed Volatility on December 29, 2024 and sell it today you would lose (42.00) from holding Intech Managed Volatility or give up 3.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Intech Managed Volatility  vs.  Perkins Select Value

Intech Managed Volatility

Risk-Adjusted Performance

Very Weak

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

Perkins Select Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perkins Select Value 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 Intech Us and Perkins Select

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

The idea behind Intech Managed Volatility and Perkins Select Value 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.