Correlation Between Issachar Fund and New World

Can any of the company-specific risk be diversified away by investing in both Issachar Fund and New World 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 New World 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 New World Fund, you can compare the effects of market volatilities on Issachar Fund and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Issachar Fund and New World.

Diversification Opportunities for Issachar Fund and New World

-0.08

Correlation Coefficient

Issachar Fund  New World

Good diversification

The 3 months correlation between Issachar and New is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Issachar Fund i.e., Issachar Fund and New World go up and down completely randomly.

Pair Corralation between Issachar Fund and New World

Assuming the 90 days horizon Issachar Fund Class is expected to generate 1.6 times more return on investment than New World. However, Issachar Fund is 1.6 times more volatile than New World Fund. It trades about 0.33 of its potential returns per unit of risk. New World Fund is currently generating about -0.06 per unit of risk. If you would invest  979.00  in Issachar Fund Class on September 5, 2024 and sell it today you would earn a total of  68.00  from holding Issachar Fund Class or generate 6.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Issachar Fund Class  vs.  New World Fund

Issachar Fund Class

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Issachar Fund Class are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Issachar Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

New World Fund

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in New World Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, New World is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Issachar Fund and New World

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

The idea behind Issachar Fund Class and New World 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.