Correlation Between College Retirement and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both College Retirement and Pacific 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 College Retirement and Pacific Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Pacific Funds Small Cap, you can compare the effects of market volatilities on College Retirement and Pacific 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 College Retirement with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Pacific Funds.
Diversification Opportunities for College Retirement and Pacific Funds
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between College and Pacific is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Pacific Funds Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Small and College Retirement 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 College Retirement Equities are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Small has no effect on the direction of College Retirement i.e., College Retirement and Pacific Funds go up and down completely randomly.
Pair Corralation between College Retirement and Pacific Funds
If you would invest 49,040 in College Retirement Equities on September 26, 2024 and sell it today you would earn a total of 2,702 from holding College Retirement Equities or generate 5.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 1.59% |
Values | Daily Returns |
College Retirement Equities vs. Pacific Funds Small Cap
Performance |
Timeline |
College Retirement |
Pacific Funds Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
College Retirement and Pacific Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with College Retirement and Pacific Funds
The main advantage of trading using opposite College Retirement and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Pacific 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard 500 Index | College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard Total Stock |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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