Correlation Between Leuthold Core and Grizzly Short

Can any of the company-specific risk be diversified away by investing in both Leuthold Core and Grizzly Short 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 Leuthold Core and Grizzly Short into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Leuthold E Investment and Grizzly Short Fund, you can compare the effects of market volatilities on Leuthold Core and Grizzly Short 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 Leuthold Core with a short position of Grizzly Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leuthold Core and Grizzly Short.

Diversification Opportunities for Leuthold Core and Grizzly Short

-0.92

Correlation Coefficient

Leuthold Core  Grizzly Short

Pay attention - limited upside

The 3 months correlation between Leuthold and Grizzly is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Leuthold E Investment and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short and Leuthold Core 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 Leuthold E Investment are associated (or correlated) with Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Leuthold Core i.e., Leuthold Core and Grizzly Short go up and down completely randomly.

Pair Corralation between Leuthold Core and Grizzly Short

Assuming the 90 days horizon Leuthold Core is expected to generate 23.62 times less return on investment than Grizzly Short. But when comparing it to its historical volatility, Leuthold E Investment is 1.49 times less risky than Grizzly Short. It trades about 0.0 of its potential returns per unit of risk. Grizzly Short Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  543.00  in Grizzly Short Fund on December 28, 2024 and sell it today you would earn a total of  19.00  from holding Grizzly Short Fund or generate 3.5% return on investment over 90 days.

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

Leuthold E Investment  vs.  Grizzly Short Fund

Leuthold E Investment

Risk-Adjusted Performance

Very Weak

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

Grizzly Short

Risk-Adjusted Performance

Modest

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

Pair Trading with Leuthold Core and Grizzly Short

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

The idea behind Leuthold E Investment and Grizzly Short 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.