Correlation Between Upright Growth and World Energy

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

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

Diversification Opportunities for Upright Growth and World Energy

0.49

Correlation Coefficient

Upright Growth  World Energy

Very weak diversification

The 3 months correlation between Upright and World is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Upright Growth Income and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy and Upright 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 Upright Growth Income are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Upright Growth i.e., Upright Growth and World Energy go up and down completely randomly.

Pair Corralation between Upright Growth and World Energy

Assuming the 90 days horizon Upright Growth is expected to generate 3.37 times less return on investment than World Energy. In addition to that, Upright Growth is 2.42 times more volatile than World Energy Fund. It trades about 0.08 of its total potential returns per unit of risk. World Energy Fund is currently generating about 0.66 per unit of volatility. If you would invest  1,434  in World Energy Fund on October 22, 2024 and sell it today you would earn a total of  143.00  from holding World Energy Fund or generate 9.97% return on investment over 90 days.

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

Upright Growth Income  vs.  World Energy Fund

Upright Growth Income

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Growth Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Upright Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

World Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in World Energy Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, World Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Upright Growth and World Energy

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

The idea behind Upright Growth Income and World Energy 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.