Correlation Between Issachar Fund and Profunds-large Cap

Can any of the company-specific risk be diversified away by investing in both Issachar Fund and Profunds-large Cap 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 Issachar Fund and Profunds-large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Issachar Fund Class and Profunds Large Cap Growth, you can compare the effects of market volatilities on Issachar Fund and Profunds-large Cap 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 Issachar Fund with a short position of Profunds-large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Issachar Fund and Profunds-large Cap.

Diversification Opportunities for Issachar Fund and Profunds-large Cap

0.72

Correlation Coefficient

Issachar Fund  Profunds-large Cap

Poor diversification

The 3 months correlation between Issachar and Profunds-large is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and Profunds Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Large Cap and Issachar Fund 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 Issachar Fund Class are associated (or correlated) with Profunds-large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Large Cap has no effect on the direction of Issachar Fund i.e., Issachar Fund and Profunds-large Cap go up and down completely randomly.

Pair Corralation between Issachar Fund and Profunds-large Cap

Assuming the 90 days horizon Issachar Fund Class is expected to under-perform the Profunds-large Cap. In addition to that, Issachar Fund is 1.06 times more volatile than Profunds Large Cap Growth. It trades about -0.26 of its total potential returns per unit of risk. Profunds Large Cap Growth is currently generating about 0.0 per unit of volatility. If you would invest  3,526  in Profunds Large Cap Growth on October 3, 2024 and sell it today you would lose (9.00) from holding Profunds Large Cap Growth or give up 0.26% of portfolio value over 90 days.

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

Issachar Fund Class  vs.  Profunds Large Cap Growth

Issachar Fund Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Issachar Fund Class are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Issachar Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Profunds Large Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Profunds Large Cap Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Profunds-large Cap may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Issachar Fund and Profunds-large Cap

The main advantage of trading using opposite Issachar Fund and Profunds-large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Issachar Fund position performs unexpectedly, Profunds-large Cap 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 Profunds-large Cap will offset losses from the drop in Profunds-large Cap's long position.

The idea behind Issachar Fund Class and Profunds Large Cap Growth 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.