Correlation Between Issachar Fund and International Equity

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

Diversification Opportunities for Issachar Fund and International Equity

-0.79

Correlation Coefficient

Issachar Fund  International Equity

Pay attention - limited upside

The 3 months correlation between Issachar and International is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and International Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Issachar Fund i.e., Issachar Fund and International Equity go up and down completely randomly.

Pair Corralation between Issachar Fund and International Equity

Assuming the 90 days horizon Issachar Fund is expected to generate 31.67 times less return on investment than International Equity. But when comparing it to its historical volatility, Issachar Fund Class is 1.12 times less risky than International Equity. It trades about 0.0 of its potential returns per unit of risk. International Equity Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,126  in International Equity Fund on September 20, 2024 and sell it today you would earn a total of  210.00  from holding International Equity Fund or generate 18.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Issachar Fund Class  vs.  International Equity Fund

Issachar Fund Class

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Issachar Fund Class are ranked lower than 14 (%) 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.

International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Equity Fund 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 Issachar Fund and International Equity

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

The idea behind Issachar Fund Class and International Equity 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.