Correlation Between Portfolio and Community Reinvestment

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

By analyzing existing cross correlation between Portfolio 21 Global and Community Reinvestment Act, you can compare the effects of market volatilities on Portfolio and Community Reinvestment 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 Portfolio with a short position of Community Reinvestment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portfolio and Community Reinvestment.

Diversification Opportunities for Portfolio and Community Reinvestment

0.54

Correlation Coefficient

Portfolio  Community Reinvestment

Very weak diversification

The 3 months correlation between Portfolio and Community is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Portfolio 21 Global and Community Reinvestment Act in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Reinvestment and Portfolio 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 Portfolio 21 Global are associated (or correlated) with Community Reinvestment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Reinvestment has no effect on the direction of Portfolio i.e., Portfolio and Community Reinvestment go up and down completely randomly.

Pair Corralation between Portfolio and Community Reinvestment

Assuming the 90 days horizon Portfolio 21 Global is expected to under-perform the Community Reinvestment. In addition to that, Portfolio is 6.02 times more volatile than Community Reinvestment Act. It trades about -0.14 of its total potential returns per unit of risk. Community Reinvestment Act is currently generating about 0.06 per unit of volatility. If you would invest  942.00  in Community Reinvestment Act on December 2, 2024 and sell it today you would earn a total of  8.00  from holding Community Reinvestment Act or generate 0.85% return on investment over 90 days.

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

Portfolio 21 Global  vs.  Community Reinvestment Act

Portfolio 21 Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Portfolio 21 Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Community Reinvestment

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Portfolio and Community Reinvestment

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

The idea behind Portfolio 21 Global and Community Reinvestment Act 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.