Correlation Between Sprucegrove International and Eic Value

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

By analyzing existing cross correlation between Sprucegrove International Equity and Eic Value Fund, you can compare the effects of market volatilities on Sprucegrove International and Eic Value 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 Sprucegrove International with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprucegrove International and Eic Value.

Diversification Opportunities for Sprucegrove International and Eic Value

0.65

Correlation Coefficient

Sprucegrove International  Eic Value

Poor diversification

The 3 months correlation between Sprucegrove and Eic is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sprucegrove International Equi and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Sprucegrove International 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 Sprucegrove International Equity are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Sprucegrove International i.e., Sprucegrove International and Eic Value go up and down completely randomly.

Pair Corralation between Sprucegrove International and Eic Value

Assuming the 90 days horizon Sprucegrove International Equity is expected to generate 1.2 times more return on investment than Eic Value. However, Sprucegrove International is 1.2 times more volatile than Eic Value Fund. It trades about 0.15 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.15 per unit of risk. If you would invest  6,539  in Sprucegrove International Equity on December 21, 2024 and sell it today you would earn a total of  513.00  from holding Sprucegrove International Equity or generate 7.85% return on investment over 90 days.

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

Sprucegrove International Equi  vs.  Eic Value Fund

Sprucegrove International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprucegrove International Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Sprucegrove International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eic Value Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eic Value Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eic Value may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sprucegrove International and Eic Value

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

The idea behind Sprucegrove International Equity and Eic Value 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.