Correlation Between Aggressive Growth and Aggressive Growth

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

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

Diversification Opportunities for Aggressive Growth and Aggressive Growth

0.74

Correlation Coefficient

Aggressive Growth  Aggressive Growth

Poor diversification

The 3 months correlation between Aggressive and Aggressive is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Portfolio and Aggressive Growth Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Aggressive Growth 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 Aggressive Growth Portfolio are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Aggressive Growth go up and down completely randomly.

Pair Corralation between Aggressive Growth and Aggressive Growth

Assuming the 90 days horizon Aggressive Growth Portfolio is expected to generate about the same return on investment as Aggressive Growth Portfolio. However, Aggressive Growth is 1.01 times more volatile than Aggressive Growth Portfolio. It trades about -0.04 of its potential returns per unit of risk. Aggressive Growth Portfolio is currently producing about -0.04 per unit of risk. If you would invest  10,585  in Aggressive Growth Portfolio on December 4, 2024 and sell it today you would lose (473.00) from holding Aggressive Growth Portfolio or give up 4.47% of portfolio value over 90 days.

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

Aggressive Growth Portfolio  vs.  Aggressive Growth Portfolio

Aggressive Growth

Risk-Adjusted Performance

Very Weak

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

Aggressive Growth

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aggressive Growth and Aggressive Growth

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

The idea behind Aggressive Growth Portfolio and Aggressive Growth Portfolio 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.