Correlation Between Stringer Growth and Heartland Value
Can any of the company-specific risk be diversified away by investing in both Stringer Growth and Heartland 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 Stringer Growth and Heartland Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stringer Growth Fund and Heartland Value Fund, you can compare the effects of market volatilities on Stringer Growth and Heartland 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 Stringer Growth with a short position of Heartland Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stringer Growth and Heartland Value.
Diversification Opportunities for Stringer Growth and Heartland Value
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stringer and Heartland is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Stringer Growth Fund and Heartland Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Value and Stringer Growth 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 Stringer Growth Fund are associated (or correlated) with Heartland Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Value has no effect on the direction of Stringer Growth i.e., Stringer Growth and Heartland Value go up and down completely randomly.
Pair Corralation between Stringer Growth and Heartland Value
Assuming the 90 days horizon Stringer Growth is expected to generate 5.42 times less return on investment than Heartland Value. But when comparing it to its historical volatility, Stringer Growth Fund is 2.42 times less risky than Heartland Value. It trades about 0.08 of its potential returns per unit of risk. Heartland Value Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,028 in Heartland Value Fund on September 12, 2024 and sell it today you would earn a total of 638.00 from holding Heartland Value Fund or generate 12.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Stringer Growth Fund vs. Heartland Value Fund
Performance |
Timeline |
Stringer Growth |
Heartland Value |
Stringer Growth and Heartland Value Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stringer Growth and Heartland Value
The main advantage of trading using opposite Stringer Growth and Heartland Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stringer Growth position performs unexpectedly, Heartland 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 Heartland Value will offset losses from the drop in Heartland Value's long position.Stringer Growth vs. Strategic Advisers Income | Stringer Growth vs. Payden High Income | Stringer Growth vs. Voya High Yield | Stringer Growth vs. Jpmorgan High Yield |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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