Correlation Between Pabrai Wagons and Great West

Can any of the company-specific risk be diversified away by investing in both Pabrai Wagons and Great West 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 Pabrai Wagons and Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pabrai Wagons Institutional and Great West Sp 500, you can compare the effects of market volatilities on Pabrai Wagons and Great West 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 Pabrai Wagons with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pabrai Wagons and Great West.

Diversification Opportunities for Pabrai Wagons and Great West

0.66

Correlation Coefficient

Pabrai Wagons  Great West

Poor diversification

The 3 months correlation between Pabrai and Great is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pabrai Wagons Institutional and Great West Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp and Pabrai Wagons 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 Pabrai Wagons Institutional are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Pabrai Wagons i.e., Pabrai Wagons and Great West go up and down completely randomly.

Pair Corralation between Pabrai Wagons and Great West

Assuming the 90 days horizon Pabrai Wagons Institutional is expected to under-perform the Great West. In addition to that, Pabrai Wagons is 1.22 times more volatile than Great West Sp 500. It trades about -0.29 of its total potential returns per unit of risk. Great West Sp 500 is currently generating about -0.09 per unit of volatility. If you would invest  3,834  in Great West Sp 500 on December 22, 2024 and sell it today you would lose (201.00) from holding Great West Sp 500 or give up 5.24% of portfolio value over 90 days.

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

Pabrai Wagons Institutional  vs.  Great West Sp 500

Pabrai Wagons Instit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pabrai Wagons Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Great West Sp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pabrai Wagons and Great West

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

The idea behind Pabrai Wagons Institutional and Great West Sp 500 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.