Correlation Between Select International and Us Core

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

By analyzing existing cross correlation between Select International Equity and Us E Equity, you can compare the effects of market volatilities on Select International and Us Core 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 Select International with a short position of Us Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select International and Us Core.

Diversification Opportunities for Select International and Us Core

0.85

Correlation Coefficient

Select International  Us Core

Very poor diversification

The 3 months correlation between Select and RSQAX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Select International Equity and Us E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us E Equity and Select International 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 Select International Equity are associated (or correlated) with Us Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us E Equity has no effect on the direction of Select International i.e., Select International and Us Core go up and down completely randomly.

Pair Corralation between Select International and Us Core

Assuming the 90 days horizon Select International Equity is expected to generate 1.07 times more return on investment than Us Core. However, Select International is 1.07 times more volatile than Us E Equity. It trades about 0.13 of its potential returns per unit of risk. Us E Equity is currently generating about 0.12 per unit of risk. If you would invest  1,152  in Select International Equity on May 19, 2025 and sell it today you would earn a total of  66.00  from holding Select International Equity or generate 5.73% return on investment over 90 days.

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

Select International Equity  vs.  Us E Equity

Select International

Risk-Adjusted Performance

Fair

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

Us E Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Us E Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Us Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Select International and Us Core

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

The idea behind Select International Equity and Us E Equity 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.

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.