Correlation Between Utilities Fund and Tanaka Growth

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

By analyzing existing cross correlation between Utilities Fund Investor and Tanaka Growth Fund, you can compare the effects of market volatilities on Utilities Fund and Tanaka Growth 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 Utilities Fund with a short position of Tanaka Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utilities Fund and Tanaka Growth.

Diversification Opportunities for Utilities Fund and Tanaka Growth

0.85

Correlation Coefficient

Utilities Fund  Tanaka Growth

Very poor diversification

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

Pair Corralation between Utilities Fund and Tanaka Growth

Assuming the 90 days horizon Utilities Fund Investor is expected to under-perform the Tanaka Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Utilities Fund Investor is 2.18 times less risky than Tanaka Growth. The mutual fund trades about -0.23 of its potential returns per unit of risk. The Tanaka Growth Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6,462  in Tanaka Growth Fund on September 11, 2025 and sell it today you would earn a total of  352.00  from holding Tanaka Growth Fund or generate 5.45% return on investment over 90 days.

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

Utilities Fund Investor  vs.  Tanaka Growth Fund

Utilities Fund Investor

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Fund Investor are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Utilities Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tanaka Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tanaka Growth Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tanaka Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Utilities Fund and Tanaka Growth

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

The idea behind Utilities Fund Investor and Tanaka Growth 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 CEOs Directory module to screen CEOs from public companies around the world.