Correlation Between International Fund and Precious Metals

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

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

Diversification Opportunities for International Fund and Precious Metals

0.5

Correlation Coefficient

International Fund  Precious Metals

Very weak diversification

The 3 months correlation between International and Precious is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and International 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 International Fund International are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of International Fund i.e., International Fund and Precious Metals go up and down completely randomly.

Pair Corralation between International Fund and Precious Metals

Assuming the 90 days horizon International Fund International is expected to generate 0.46 times more return on investment than Precious Metals. However, International Fund International is 2.17 times less risky than Precious Metals. It trades about -0.05 of its potential returns per unit of risk. Precious Metals And is currently generating about -0.03 per unit of risk. If you would invest  2,890  in International Fund International on September 15, 2024 and sell it today you would lose (81.00) from holding International Fund International or give up 2.8% of portfolio value over 90 days.

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

International Fund Internation  vs.  Precious Metals And

International Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Precious Metals And

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with International Fund and Precious Metals

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

The idea behind International Fund International and Precious Metals And 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.