Correlation Between Monthly Rebalance and Teberg Fund

Can any of the company-specific risk be diversified away by investing in both Monthly Rebalance and Teberg Fund 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 Teberg Fund 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 The Teberg Fund, you can compare the effects of market volatilities on Monthly Rebalance and Teberg Fund 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 Teberg Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monthly Rebalance and Teberg Fund.

Diversification Opportunities for Monthly Rebalance and Teberg Fund

0.7

Correlation Coefficient

Monthly Rebalance  Teberg Fund

Poor diversification

The 3 months correlation between Monthly and Teberg is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Monthly Rebalance Nasdaq 100 and The Teberg Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teberg Fund 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 Teberg Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teberg Fund has no effect on the direction of Monthly Rebalance i.e., Monthly Rebalance and Teberg Fund go up and down completely randomly.

Pair Corralation between Monthly Rebalance and Teberg Fund

Assuming the 90 days horizon Monthly Rebalance Nasdaq 100 is expected to under-perform the Teberg Fund. In addition to that, Monthly Rebalance is 14.54 times more volatile than The Teberg Fund. It trades about -0.01 of its total potential returns per unit of risk. The Teberg Fund is currently generating about 0.15 per unit of volatility. If you would invest  2,484  in The Teberg Fund on September 19, 2024 and sell it today you would earn a total of  53.00  from holding The Teberg Fund or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Monthly Rebalance Nasdaq 100  vs.  The Teberg Fund

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.

Teberg Fund

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Teberg Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Teberg Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Monthly Rebalance and Teberg Fund

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

The idea behind Monthly Rebalance Nasdaq 100 and The Teberg Fund 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.