Correlation Between Pender Real and Aristotle Funds

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

By analyzing existing cross correlation between Pender Real Estate and Aristotle Funds Series, you can compare the effects of market volatilities on Pender Real and Aristotle Funds 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 Pender Real with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pender Real and Aristotle Funds.

Diversification Opportunities for Pender Real and Aristotle Funds

0.71

Correlation Coefficient

Pender Real  Aristotle Funds

Poor diversification

The 3 months correlation between Pender and Aristotle is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Pender Real 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 Pender Real Estate are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Pender Real i.e., Pender Real and Aristotle Funds go up and down completely randomly.

Pair Corralation between Pender Real and Aristotle Funds

Assuming the 90 days horizon Pender Real is expected to generate 4.18 times less return on investment than Aristotle Funds. But when comparing it to its historical volatility, Pender Real Estate is 12.79 times less risky than Aristotle Funds. It trades about 0.41 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  976.00  in Aristotle Funds Series on October 3, 2024 and sell it today you would earn a total of  417.00  from holding Aristotle Funds Series or generate 42.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	70.45%
Values	Daily Returns

Pender Real Estate  vs.  Aristotle Funds Series

Pender Real Estate

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pender Real Estate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pender Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aristotle Funds Series

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aristotle Funds Series are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Aristotle Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pender Real and Aristotle Funds

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

The idea behind Pender Real Estate and Aristotle Funds Series 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.