Correlation Between Electronics Fund and Ivy Science
Can any of the company-specific risk be diversified away by investing in both Electronics Fund and Ivy Science 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 Electronics Fund and Ivy Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronics Fund Class and Ivy Science And, you can compare the effects of market volatilities on Electronics Fund and Ivy Science 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 Electronics Fund with a short position of Ivy Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Fund and Ivy Science.
Diversification Opportunities for Electronics Fund and Ivy Science
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Electronics and Ivy is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Fund Class and Ivy Science And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Science And and Electronics 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 Electronics Fund Class are associated (or correlated) with Ivy Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Science And has no effect on the direction of Electronics Fund i.e., Electronics Fund and Ivy Science go up and down completely randomly.
Pair Corralation between Electronics Fund and Ivy Science
Assuming the 90 days horizon Electronics Fund Class is expected to under-perform the Ivy Science. In addition to that, Electronics Fund is 1.2 times more volatile than Ivy Science And. It trades about -0.18 of its total potential returns per unit of risk. Ivy Science And is currently generating about -0.19 per unit of volatility. If you would invest 7,185 in Ivy Science And on January 25, 2024 and sell it today you would lose (476.00) from holding Ivy Science And or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronics Fund Class vs. Ivy Science And
Performance |
| Timeline |
| Electronics Fund Class |
| Ivy Science And |
Electronics Fund and Ivy Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Fund and Ivy Science
The main advantage of trading using opposite Electronics Fund and Ivy Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Fund position performs unexpectedly, Ivy Science 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 Science will offset losses from the drop in Ivy Science's long position.| Electronics Fund vs. Blackrock Sm Cap | Electronics Fund vs. Pgim Jennison Diversified | Electronics Fund vs. Aqr Diversified Arbitrage | Electronics Fund vs. Massmutual Select Diversified |
| Ivy Science vs. Royce Global Financial | Ivy Science vs. Mesirow Financial Small | Ivy Science vs. Franklin Mutual Financial | Ivy Science vs. Vanguard Financials Index |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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