Correlation Between Retailing Fund and Bts Enhanced

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

By analyzing existing cross correlation between Retailing Fund Class and Bts Enhanced Equity, you can compare the effects of market volatilities on Retailing Fund and Bts Enhanced 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 Retailing Fund with a short position of Bts Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retailing Fund and Bts Enhanced.

Diversification Opportunities for Retailing Fund and Bts Enhanced

0.9

Correlation Coefficient

Retailing Fund  Bts Enhanced

Almost no diversification

The 3 months correlation between Retailing and Bts is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Retailing Fund Class and Bts Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Enhanced Equity and Retailing 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 Retailing Fund Class are associated (or correlated) with Bts Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Enhanced Equity has no effect on the direction of Retailing Fund i.e., Retailing Fund and Bts Enhanced go up and down completely randomly.

Pair Corralation between Retailing Fund and Bts Enhanced

Assuming the 90 days horizon Retailing Fund Class is expected to generate 1.61 times more return on investment than Bts Enhanced. However, Retailing Fund is 1.61 times more volatile than Bts Enhanced Equity. It trades about 0.2 of its potential returns per unit of risk. Bts Enhanced Equity is currently generating about 0.13 per unit of risk. If you would invest  3,975  in Retailing Fund Class on April 29, 2025 and sell it today you would earn a total of  489.00  from holding Retailing Fund Class or generate 12.3% return on investment over 90 days.

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

Retailing Fund Class  vs.  Bts Enhanced Equity

Retailing Fund Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Retailing Fund Class are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Retailing Fund may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Bts Enhanced Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bts Enhanced 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, Bts Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Retailing Fund and Bts Enhanced

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

The idea behind Retailing Fund Class and Bts Enhanced 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.