Correlation Between Scharf Fund and Ab Fixed-income

Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Ab Fixed-income 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 Scharf Fund and Ab Fixed-income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Scharf Fund Retail and Ab Fixed Income Shares, you can compare the effects of market volatilities on Scharf Fund and Ab Fixed-income 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 Scharf Fund with a short position of Ab Fixed-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Ab Fixed-income.

Diversification Opportunities for Scharf Fund and Ab Fixed-income

0.0

Correlation Coefficient

Scharf Fund  Ab Fixed-income

Pay attention - limited upside

The 3 months correlation between Scharf and AECXX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Ab Fixed Income Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Fixed Income and Scharf 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 Scharf Fund Retail are associated (or correlated) with Ab Fixed-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Fixed Income has no effect on the direction of Scharf Fund i.e., Scharf Fund and Ab Fixed-income go up and down completely randomly.

Pair Corralation between Scharf Fund and Ab Fixed-income

Assuming the 90 days horizon Scharf Fund is expected to generate 122.43 times less return on investment than Ab Fixed-income. But when comparing it to its historical volatility, Scharf Fund Retail is 48.66 times less risky than Ab Fixed-income. It trades about 0.02 of its potential returns per unit of risk. Ab Fixed Income Shares is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  409.00  in Ab Fixed Income Shares on October 21, 2024 and sell it today you would lose (309.00) from holding Ab Fixed Income Shares or give up 75.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	50.4%
Values	Daily Returns

Scharf Fund Retail  vs.  Ab Fixed Income Shares

Scharf Fund Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scharf Fund Retail 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.

Ab Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Fixed Income Shares has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Fixed-income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Scharf Fund and Ab Fixed-income

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

The idea behind Scharf Fund Retail and Ab Fixed Income Shares 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..