Correlation Between International Value and The Tocqueville

Can any of the company-specific risk be diversified away by investing in both International Value and The Tocqueville 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 International Value and The Tocqueville into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between International Value Fund and The Tocqueville International, you can compare the effects of market volatilities on International Value and The Tocqueville 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 International Value with a short position of The Tocqueville. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Value and The Tocqueville.

Diversification Opportunities for International Value and The Tocqueville

0.65

Correlation Coefficient

International Value  The Tocqueville

Poor diversification

The 3 months correlation between International and The is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding International Value Fund and The Tocqueville International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville Inte and International Value 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 International Value Fund are associated (or correlated) with The Tocqueville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville Inte has no effect on the direction of International Value i.e., International Value and The Tocqueville go up and down completely randomly.

Pair Corralation between International Value and The Tocqueville

Assuming the 90 days horizon International Value Fund is expected to generate 0.97 times more return on investment than The Tocqueville. However, International Value Fund is 1.03 times less risky than The Tocqueville. It trades about 0.25 of its potential returns per unit of risk. The Tocqueville International is currently generating about 0.01 per unit of risk. If you would invest  839.00  in International Value Fund on October 26, 2024 and sell it today you would earn a total of  31.00  from holding International Value Fund or generate 3.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

International Value Fund  vs.  The Tocqueville International

International Value

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tocqueville Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Tocqueville International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 International Value and The Tocqueville

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

The idea behind International Value Fund and The Tocqueville International 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.