Correlation Between Select International and Select Us

Can any of the company-specific risk be diversified away by investing in both Select International and Select Us 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 Select Us 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 Select Equity Fund, you can compare the effects of market volatilities on Select International and Select Us 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 Select Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select International and Select Us.

Diversification Opportunities for Select International and Select Us

0.87

Correlation Coefficient

Select International  Select Us

Very poor diversification

The 3 months correlation between Select and Select is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Select International Equity and Select Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select 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 Select Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Equity has no effect on the direction of Select International i.e., Select International and Select Us go up and down completely randomly.

Pair Corralation between Select International and Select Us

Assuming the 90 days horizon Select International is expected to generate 1.28 times less return on investment than Select Us. In addition to that, Select International is 1.02 times more volatile than Select Equity Fund. It trades about 0.16 of its total potential returns per unit of risk. Select Equity Fund is currently generating about 0.2 per unit of volatility. If you would invest  1,517  in Select Equity Fund on May 12, 2025 and sell it today you would earn a total of  134.00  from holding Select Equity Fund or generate 8.83% 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.  Select Equity Fund

Select International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Select International Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Select International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Select Equity

Risk-Adjusted Performance

Solid

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

Pair Trading with Select International and Select Us

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

The idea behind Select International Equity and Select Equity Fund 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.