Correlation Between Us Global and Pfg American

Can any of the company-specific risk be diversified away by investing in both Us Global and Pfg American 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 Us Global and Pfg American into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Us Global Investors and Pfg American Funds, you can compare the effects of market volatilities on Us Global and Pfg American 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 Us Global with a short position of Pfg American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Pfg American.

Diversification Opportunities for Us Global and Pfg American

0.39

Correlation Coefficient

Us Global  Pfg American

Weak diversification

The 3 months correlation between USLUX and Pfg is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Investors and Pfg American Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfg American Funds and Us Global 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 Us Global Investors are associated (or correlated) with Pfg American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfg American Funds has no effect on the direction of Us Global i.e., Us Global and Pfg American go up and down completely randomly.

Pair Corralation between Us Global and Pfg American

Assuming the 90 days horizon Us Global Investors is expected to under-perform the Pfg American. In addition to that, Us Global is 6.16 times more volatile than Pfg American Funds. It trades about -0.08 of its total potential returns per unit of risk. Pfg American Funds is currently generating about 0.13 per unit of volatility. If you would invest  946.00  in Pfg American Funds on December 18, 2024 and sell it today you would earn a total of  18.00  from holding Pfg American Funds or generate 1.9% return on investment over 90 days.

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

Us Global Investors  vs.  Pfg American Funds

Us Global Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Us Global Investors 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.

Pfg American Funds

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pfg American Funds are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pfg American is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Us Global and Pfg American

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

The idea behind Us Global Investors and Pfg American Funds 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.