Correlation Between Tfa Alphagen and Growth Income

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

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

Diversification Opportunities for Tfa Alphagen and Growth Income

0.99

Correlation Coefficient

Tfa Alphagen  Growth Income

No risk reduction

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

Pair Corralation between Tfa Alphagen and Growth Income

Assuming the 90 days horizon Tfa Alphagen Growth is expected to generate 1.05 times more return on investment than Growth Income. However, Tfa Alphagen is 1.05 times more volatile than Growth Income Fund. It trades about 0.22 of its potential returns per unit of risk. Growth Income Fund is currently generating about 0.22 per unit of risk. If you would invest  1,024  in Tfa Alphagen Growth on September 4, 2024 and sell it today you would earn a total of  113.00  from holding Tfa Alphagen Growth or generate 11.04% return on investment over 90 days.

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

Tfa Alphagen Growth  vs.  Growth Income Fund

Tfa Alphagen Growth

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tfa Alphagen Growth are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Tfa Alphagen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Growth Income

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Income Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Growth Income may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tfa Alphagen and Growth Income

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

The idea behind Tfa Alphagen Growth and Growth Income 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.