Correlation Between Leader Total and Eic Value

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

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

Diversification Opportunities for Leader Total and Eic Value

-0.15

Correlation Coefficient

Leader Total  Eic Value

Good diversification

The 3 months correlation between Leader and Eic is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Leader Total Return 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 Leader Total 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 Leader Total Return 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 Leader Total i.e., Leader Total and Eic Value go up and down completely randomly.

Pair Corralation between Leader Total and Eic Value

Assuming the 90 days horizon Leader Total Return is expected to generate 0.04 times more return on investment than Eic Value. However, Leader Total Return is 27.86 times less risky than Eic Value. It trades about -0.32 of its potential returns per unit of risk. Eic Value Fund is currently generating about -0.15 per unit of risk. If you would invest  1,166  in Leader Total Return on October 11, 2024 and sell it today you would lose (2.00) from holding Leader Total Return or give up 0.17% of portfolio value over 90 days.

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

Leader Total Return  vs.  Eic Value Fund

Leader Total Return

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leader Total Return are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Leader Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 Leader Total and Eic Value

The main advantage of trading using opposite Leader Total and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Total 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 Leader Total Return 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.