Correlation Between Teberg Fund and All Asset

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

By analyzing existing cross correlation between The Teberg Fund and All Asset Fund, you can compare the effects of market volatilities on Teberg Fund and All Asset 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 Teberg Fund with a short position of All Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teberg Fund and All Asset.

Diversification Opportunities for Teberg Fund and All Asset

0.69

Correlation Coefficient

Teberg Fund  All Asset

Poor diversification

The 3 months correlation between Teberg and All is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Teberg Fund and All Asset Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Asset Fund and Teberg Fund 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 The Teberg Fund are associated (or correlated) with All Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Asset Fund has no effect on the direction of Teberg Fund i.e., Teberg Fund and All Asset go up and down completely randomly.

Pair Corralation between Teberg Fund and All Asset

Assuming the 90 days horizon The Teberg Fund is expected to generate 2.67 times more return on investment than All Asset. However, Teberg Fund is 2.67 times more volatile than All Asset Fund. It trades about 0.09 of its potential returns per unit of risk. All Asset Fund is currently generating about 0.05 per unit of risk. If you would invest  1,516  in The Teberg Fund on October 9, 2024 and sell it today you would earn a total of  981.00  from holding The Teberg Fund or generate 64.71% return on investment over 90 days.

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

The Teberg Fund  vs.  All Asset Fund

Teberg Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Teberg Fund has generated negative risk-adjusted returns adding no value to fund investors. 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.

All Asset Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Teberg Fund and All Asset

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

The idea behind The Teberg Fund and All Asset 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.