Correlation Between Cref Money and Smallcap Fund

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

By analyzing existing cross correlation between Cref Money Market and Smallcap Fund Fka, you can compare the effects of market volatilities on Cref Money and Smallcap Fund 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 Cref Money with a short position of Smallcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Smallcap Fund.

Diversification Opportunities for Cref Money and Smallcap Fund

0.93

Correlation Coefficient

Cref Money  Smallcap Fund

Almost no diversification

The 3 months correlation between Cref and Smallcap is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Smallcap Fund Fka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Fund Fka and Cref Money 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 Cref Money Market are associated (or correlated) with Smallcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Fund Fka has no effect on the direction of Cref Money i.e., Cref Money and Smallcap Fund go up and down completely randomly.

Pair Corralation between Cref Money and Smallcap Fund

Assuming the 90 days trading horizon Cref Money is expected to generate 12.29 times less return on investment than Smallcap Fund. But when comparing it to its historical volatility, Cref Money Market is 50.5 times less risky than Smallcap Fund. It trades about 0.95 of its potential returns per unit of risk. Smallcap Fund Fka is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,398  in Smallcap Fund Fka on May 21, 2025 and sell it today you would earn a total of  313.00  from holding Smallcap Fund Fka or generate 13.05% return on investment over 90 days.

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

Cref Money Market  vs.  Smallcap Fund Fka

Cref Money Market

Risk-Adjusted Performance

Elite

Compared to the overall equity markets, risk-adjusted returns on investments in Cref Money Market are ranked lower than 74 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Cref Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Smallcap Fund Fka

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Smallcap Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cref Money and Smallcap Fund

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

The idea behind Cref Money Market and Smallcap Fund Fka 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.