Correlation Between Small Company and Amana Growth
Can any of the company-specific risk be diversified away by investing in both Small Company and Amana Growth 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 Small Company and Amana Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Amana Growth Fund, you can compare the effects of market volatilities on Small Company and Amana Growth 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 Small Company with a short position of Amana Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Amana Growth.
Diversification Opportunities for Small Company and Amana Growth
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Small and Amana is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Amana Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Growth and Small Company 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 Small Pany Growth are associated (or correlated) with Amana Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Growth has no effect on the direction of Small Company i.e., Small Company and Amana Growth go up and down completely randomly.
Pair Corralation between Small Company and Amana Growth
Assuming the 90 days horizon Small Pany Growth is expected to generate 1.81 times more return on investment than Amana Growth. However, Small Company is 1.81 times more volatile than Amana Growth Fund. It trades about -0.05 of its potential returns per unit of risk. Amana Growth Fund is currently generating about -0.1 per unit of risk. If you would invest 1,632 in Small Pany Growth on December 2, 2024 and sell it today you would lose (120.00) from holding Small Pany Growth or give up 7.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Small Pany Growth vs. Amana Growth Fund
Performance |
Timeline |
Small Pany Growth |
Amana Growth |
Small Company and Amana Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Small Company and Amana Growth
The main advantage of trading using opposite Small Company and Amana Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company position performs unexpectedly, Amana Growth 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 Amana Growth will offset losses from the drop in Amana Growth's long position.Small Company vs. Mid Cap Growth | Small Company vs. Growth Portfolio Class | Small Company vs. Morgan Stanley Multi | Small Company vs. Emerging Markets Portfolio |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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