Correlation Between International Fund and Cornerstone Moderately

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

Diversification Opportunities for International Fund and Cornerstone Moderately

0.84

Correlation Coefficient

International Fund  Cornerstone Moderately

Very poor diversification

The 3 months correlation between International and Cornerstone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and Cornerstone Moderately Aggress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Moderately 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 Cornerstone Moderately. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Moderately has no effect on the direction of International Fund i.e., International Fund and Cornerstone Moderately go up and down completely randomly.

Pair Corralation between International Fund and Cornerstone Moderately

Assuming the 90 days horizon International Fund International is expected to under-perform the Cornerstone Moderately. In addition to that, International Fund is 1.11 times more volatile than Cornerstone Moderately Aggressive. It trades about -0.18 of its total potential returns per unit of risk. Cornerstone Moderately Aggressive is currently generating about -0.2 per unit of volatility. If you would invest  2,847  in Cornerstone Moderately Aggressive on October 7, 2024 and sell it today you would lose (233.00) from holding Cornerstone Moderately Aggressive or give up 8.18% of portfolio value over 90 days.

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

International Fund Internation  vs.  Cornerstone Moderately Aggress

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 latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Cornerstone Moderately

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cornerstone Moderately Aggressive has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with International Fund and Cornerstone Moderately

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

The idea behind International Fund International and Cornerstone Moderately Aggressive 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.