Correlation Between Classic Value and Us Global

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

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

Diversification Opportunities for Classic Value and Us Global

0.97

Correlation Coefficient

Classic Value  Us Global

Almost no diversification

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

Pair Corralation between Classic Value and Us Global

Assuming the 90 days horizon Classic Value is expected to generate 1.22 times less return on investment than Us Global. In addition to that, Classic Value is 1.34 times more volatile than Us Global Leaders. It trades about 0.13 of its total potential returns per unit of risk. Us Global Leaders is currently generating about 0.2 per unit of volatility. If you would invest  6,962  in Us Global Leaders on May 1, 2025 and sell it today you would earn a total of  692.00  from holding Us Global Leaders or generate 9.94% return on investment over 90 days.

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

Classic Value Fund  vs.  Us Global Leaders

Classic Value

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Classic Value Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Classic Value may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Us Global Leaders

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Us Global Leaders are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Us Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Classic Value and Us Global

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

The idea behind Classic Value Fund and Us Global Leaders 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .