Correlation Between Upright Growth and Ivy Balanced

Can any of the company-specific risk be diversified away by investing in both Upright Growth and Ivy Balanced 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 Ivy Balanced 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 Ivy Balanced Fund, you can compare the effects of market volatilities on Upright Growth and Ivy Balanced 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 Ivy Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upright Growth and Ivy Balanced.

Diversification Opportunities for Upright Growth and Ivy Balanced

0.55

Correlation Coefficient

Upright Growth  Ivy Balanced

Very weak diversification

The 3 months correlation between Upright and Ivy is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Upright Growth Income and Ivy Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Balanced 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 Ivy Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Balanced has no effect on the direction of Upright Growth i.e., Upright Growth and Ivy Balanced go up and down completely randomly.

Pair Corralation between Upright Growth and Ivy Balanced

Assuming the 90 days horizon Upright Growth Income is expected to generate 2.97 times more return on investment than Ivy Balanced. However, Upright Growth is 2.97 times more volatile than Ivy Balanced Fund. It trades about 0.12 of its potential returns per unit of risk. Ivy Balanced Fund is currently generating about 0.07 per unit of risk. If you would invest  1,868  in Upright Growth Income on October 24, 2024 and sell it today you would earn a total of  238.00  from holding Upright Growth Income or generate 12.74% 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.  Ivy Balanced Fund

Upright Growth Income

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Growth Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Upright Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Ivy Balanced

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Balanced Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ivy Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Upright Growth and Ivy Balanced

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

The idea behind Upright Growth Income and Ivy Balanced 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.