Correlation Between Ridgeworth Ceredex and Ridgeworth International

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

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

Diversification Opportunities for Ridgeworth Ceredex and Ridgeworth International

0.99

Correlation Coefficient

Ridgeworth Ceredex  Ridgeworth International

No risk reduction

The 3 months correlation between Ridgeworth and Ridgeworth is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ridgeworth Ceredex Large and Ridgeworth International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth International and Ridgeworth Ceredex 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 Ridgeworth Ceredex Large are associated (or correlated) with Ridgeworth International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth International has no effect on the direction of Ridgeworth Ceredex i.e., Ridgeworth Ceredex and Ridgeworth International go up and down completely randomly.

Pair Corralation between Ridgeworth Ceredex and Ridgeworth International

Assuming the 90 days horizon Ridgeworth Ceredex Large is expected to generate 0.79 times more return on investment than Ridgeworth International. However, Ridgeworth Ceredex Large is 1.27 times less risky than Ridgeworth International. It trades about -0.12 of its potential returns per unit of risk. Ridgeworth International Equity is currently generating about -0.11 per unit of risk. If you would invest  1,166  in Ridgeworth Ceredex Large on December 4, 2024 and sell it today you would lose (231.00) from holding Ridgeworth Ceredex Large or give up 19.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.33%
Values	Daily Returns

Ridgeworth Ceredex Large  vs.  Ridgeworth International Equit

Ridgeworth Ceredex Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ridgeworth Ceredex Large 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Ridgeworth International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ridgeworth International Equity 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 forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Ridgeworth Ceredex and Ridgeworth International

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

The idea behind Ridgeworth Ceredex Large and Ridgeworth International Equity 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.