Correlation Between Transamerica Funds and Oakhurst Short

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

By analyzing existing cross correlation between Transamerica Funds and Oakhurst Short Duration, you can compare the effects of market volatilities on Transamerica Funds and Oakhurst Short 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 Transamerica Funds with a short position of Oakhurst Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Funds and Oakhurst Short.

Diversification Opportunities for Transamerica Funds and Oakhurst Short

-0.02

Correlation Coefficient

Transamerica Funds  Oakhurst Short

Good diversification

The 3 months correlation between Transamerica and Oakhurst is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Funds and Oakhurst Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakhurst Short Duration and Transamerica Funds 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 Transamerica Funds are associated (or correlated) with Oakhurst Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakhurst Short Duration has no effect on the direction of Transamerica Funds i.e., Transamerica Funds and Oakhurst Short go up and down completely randomly.

Pair Corralation between Transamerica Funds and Oakhurst Short

Assuming the 90 days horizon Transamerica Funds is expected to generate 1.19 times less return on investment than Oakhurst Short. In addition to that, Transamerica Funds is 1.81 times more volatile than Oakhurst Short Duration. It trades about 0.07 of its total potential returns per unit of risk. Oakhurst Short Duration is currently generating about 0.16 per unit of volatility. If you would invest  773.00  in Oakhurst Short Duration on October 11, 2024 and sell it today you would earn a total of  119.00  from holding Oakhurst Short Duration or generate 15.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.81%
Values	Daily Returns

Transamerica Funds   vs.  Oakhurst Short Duration

Transamerica Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oakhurst Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Transamerica Funds and Oakhurst Short

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

The idea behind Transamerica Funds and Oakhurst Short Duration 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.