Correlation Between Small-cap Profund and Performance Trust

Can any of the company-specific risk be diversified away by investing in both Small-cap Profund and Performance Trust 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 Small-cap Profund and Performance Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Small Cap Profund Small Cap and Performance Trust Strategic, you can compare the effects of market volatilities on Small-cap Profund and Performance Trust 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 Small-cap Profund with a short position of Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small-cap Profund and Performance Trust.

Diversification Opportunities for Small-cap Profund and Performance Trust

0.76

Correlation Coefficient

Small-cap Profund  Performance Trust

Poor diversification

The 3 months correlation between SMALL-CAP and Performance is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Profund Small Cap and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust and Small-cap Profund 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 Small Cap Profund Small Cap are associated (or correlated) with Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Small-cap Profund i.e., Small-cap Profund and Performance Trust go up and down completely randomly.

Pair Corralation between Small-cap Profund and Performance Trust

Assuming the 90 days horizon Small Cap Profund Small Cap is expected to generate 4.08 times more return on investment than Performance Trust. However, Small-cap Profund is 4.08 times more volatile than Performance Trust Strategic. It trades about 0.17 of its potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.12 per unit of risk. If you would invest  10,526  in Small Cap Profund Small Cap on May 25, 2025 and sell it today you would earn a total of  1,344  from holding Small Cap Profund Small Cap or generate 12.77% return on investment over 90 days.

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

Small Cap Profund Small Cap  vs.  Performance Trust Strategic

Small Cap Profund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Profund Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Small-cap Profund showed solid returns over the last few months and may actually be approaching a breakup point.

Performance Trust

Risk-Adjusted Performance

Fair

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

Pair Trading with Small-cap Profund and Performance Trust

The main advantage of trading using opposite Small-cap Profund and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small-cap Profund position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.

The idea behind Small Cap Profund Small Cap and Performance Trust Strategic 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.