Correlation Between Great West and International Fund

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

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

Diversification Opportunities for Great West and International Fund

0.52

Correlation Coefficient

Great West  International Fund

Very weak diversification

The 3 months correlation between Great and International is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Great West Inflation Protected and International Fund Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Fund and Great West 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 Great West Inflation Protected Securities are associated (or correlated) with International Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Fund has no effect on the direction of Great West i.e., Great West and International Fund go up and down completely randomly.

Pair Corralation between Great West and International Fund

Assuming the 90 days horizon Great West Inflation Protected Securities is expected to under-perform the International Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Great West Inflation Protected Securities is 1.83 times less risky than International Fund. The mutual fund trades about -0.02 of its potential returns per unit of risk. The International Fund International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,590  in International Fund International on December 27, 2024 and sell it today you would earn a total of  214.00  from holding International Fund International or generate 8.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Great West Inflation Protected  vs.  International Fund Internation

Great West Inflation

Risk-Adjusted Performance

Modest

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

International Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Fund International are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, International Fund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Great West and International Fund

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

The idea behind Great West Inflation Protected Securities and International Fund 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 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.