Correlation Between Scharf Fund and Rationalpier

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

By analyzing existing cross correlation between Scharf Fund Institutional and Rationalpier 88 Convertible, you can compare the effects of market volatilities on Scharf Fund and Rationalpier 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 Scharf Fund with a short position of Rationalpier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Rationalpier.

Diversification Opportunities for Scharf Fund and Rationalpier

0.44

Correlation Coefficient

Scharf Fund  Rationalpier

Very weak diversification

The 3 months correlation between Scharf and Rationalpier is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Institutional and Rationalpier 88 Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rationalpier 88 Conv and Scharf 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 Scharf Fund Institutional are associated (or correlated) with Rationalpier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rationalpier 88 Conv has no effect on the direction of Scharf Fund i.e., Scharf Fund and Rationalpier go up and down completely randomly.

Pair Corralation between Scharf Fund and Rationalpier

Assuming the 90 days horizon Scharf Fund is expected to generate 1.14 times less return on investment than Rationalpier. In addition to that, Scharf Fund is 1.6 times more volatile than Rationalpier 88 Convertible. It trades about 0.08 of its total potential returns per unit of risk. Rationalpier 88 Convertible is currently generating about 0.15 per unit of volatility. If you would invest  1,086  in Rationalpier 88 Convertible on May 26, 2025 and sell it today you would earn a total of  37.00  from holding Rationalpier 88 Convertible or generate 3.41% return on investment over 90 days.

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

Scharf Fund Institutional  vs.  Rationalpier 88 Convertible

Scharf Fund Institutional

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Fund Institutional are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Scharf Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rationalpier 88 Conv

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rationalpier 88 Convertible are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Rationalpier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Scharf Fund and Rationalpier

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

The idea behind Scharf Fund Institutional and Rationalpier 88 Convertible 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.