Correlation Between Chase Growth and Wells Fargo

Can any of the company-specific risk be diversified away by investing in both Chase Growth and Wells Fargo 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 Chase Growth and Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chase Growth Fund and Wells Fargo Mon, you can compare the effects of market volatilities on Chase Growth and Wells Fargo 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 Chase Growth with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and Wells Fargo.

Diversification Opportunities for Chase Growth and Wells Fargo

0.97

Correlation Coefficient

Chase Growth  Wells Fargo

Almost no diversification

The 3 months correlation between Chase and Wells is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and Wells Fargo Mon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Mon and Chase Growth 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 Chase Growth Fund are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Mon has no effect on the direction of Chase Growth i.e., Chase Growth and Wells Fargo go up and down completely randomly.

Pair Corralation between Chase Growth and Wells Fargo

Assuming the 90 days horizon Chase Growth Fund is expected to generate 0.8 times more return on investment than Wells Fargo. However, Chase Growth Fund is 1.25 times less risky than Wells Fargo. It trades about 0.39 of its potential returns per unit of risk. Wells Fargo Mon is currently generating about 0.22 per unit of risk. If you would invest  1,279  in Chase Growth Fund on April 30, 2025 and sell it today you would earn a total of  265.00  from holding Chase Growth Fund or generate 20.72% return on investment over 90 days.

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

Chase Growth Fund  vs.  Wells Fargo Mon

Chase Growth

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Chase Growth Fund are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Chase Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Wells Fargo Mon

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wells Fargo Mon are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Wells Fargo showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chase Growth and Wells Fargo

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

The idea behind Chase Growth Fund and Wells Fargo Mon 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.