Correlation Between Monthly Rebalance and Summit Global

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

By analyzing existing cross correlation between Monthly Rebalance Nasdaq 100 and Summit Global Investments, you can compare the effects of market volatilities on Monthly Rebalance and Summit Global 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 Monthly Rebalance with a short position of Summit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monthly Rebalance and Summit Global.

Diversification Opportunities for Monthly Rebalance and Summit Global

0.81

Correlation Coefficient

Monthly Rebalance  Summit Global

Very poor diversification

The 3 months correlation between Monthly and Summit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Monthly Rebalance Nasdaq 100 and Summit Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Global Investments and Monthly Rebalance 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 Monthly Rebalance Nasdaq 100 are associated (or correlated) with Summit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Global Investments has no effect on the direction of Monthly Rebalance i.e., Monthly Rebalance and Summit Global go up and down completely randomly.

Pair Corralation between Monthly Rebalance and Summit Global

Assuming the 90 days horizon Monthly Rebalance Nasdaq 100 is expected to generate 2.32 times more return on investment than Summit Global. However, Monthly Rebalance is 2.32 times more volatile than Summit Global Investments. It trades about -0.01 of its potential returns per unit of risk. Summit Global Investments is currently generating about -0.12 per unit of risk. If you would invest  54,489  in Monthly Rebalance Nasdaq 100 on October 8, 2024 and sell it today you would lose (7,167) from holding Monthly Rebalance Nasdaq 100 or give up 13.15% of portfolio value over 90 days.

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

Monthly Rebalance Nasdaq 100  vs.  Summit Global Investments

Monthly Rebalance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monthly Rebalance Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Monthly Rebalance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Summit Global Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summit Global Investments has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Monthly Rebalance and Summit Global

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

The idea behind Monthly Rebalance Nasdaq 100 and Summit Global Investments 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.