Correlation Between Us Government and Stocksplus Fund

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

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

Diversification Opportunities for Us Government and Stocksplus Fund

0.83

Correlation Coefficient

Us Government  Stocksplus Fund

Very poor diversification

The 3 months correlation between RGVAX and Stocksplus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Stocksplus Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Fund C and Us Government 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 Us Government Securities are associated (or correlated) with Stocksplus Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Fund C has no effect on the direction of Us Government i.e., Us Government and Stocksplus Fund go up and down completely randomly.

Pair Corralation between Us Government and Stocksplus Fund

Assuming the 90 days horizon Us Government is expected to generate 3.79 times less return on investment than Stocksplus Fund. But when comparing it to its historical volatility, Us Government Securities is 1.93 times less risky than Stocksplus Fund. It trades about 0.13 of its potential returns per unit of risk. Stocksplus Fund C is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  936.00  in Stocksplus Fund C on May 26, 2025 and sell it today you would earn a total of  91.00  from holding Stocksplus Fund C or generate 9.72% return on investment over 90 days.

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

Us Government Securities  vs.  Stocksplus Fund C

Us Government Securities

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Us Government Securities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Us Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stocksplus Fund C

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stocksplus Fund C are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Stocksplus Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Us Government and Stocksplus Fund

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

The idea behind Us Government Securities and Stocksplus Fund C 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.