Correlation Between Scharf Fund and Global Real

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

Diversification Opportunities for Scharf Fund and Global Real

-0.15

Correlation Coefficient

Scharf Fund  Global Real

Good diversification

The 3 months correlation between Scharf and Global is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Global Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Real Estate 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 Global Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Real Estate has no effect on the direction of Scharf Fund i.e., Scharf Fund and Global Real go up and down completely randomly.

Pair Corralation between Scharf Fund and Global Real

Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Global Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Fund Retail is 5.0 times less risky than Global Real. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Global Real Estate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  907.00  in Global Real Estate on December 21, 2024 and sell it today you would earn a total of  22.00  from holding Global Real Estate or generate 2.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Scharf Fund Retail  vs.  Global Real Estate

Scharf Fund Retail

Risk-Adjusted Performance

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 fairly strong basic indicators, Scharf Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Real Estate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Real Estate are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Real 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 Global Real

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

The idea behind Scharf Fund Retail and Global Real Estate 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..