Correlation Between Global Growth and Heritage Fund
Can any of the company-specific risk be diversified away by investing in both Global Growth and Heritage Fund 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 Global Growth and Heritage Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Growth Fund and Heritage Fund I, you can compare the effects of market volatilities on Global Growth and Heritage Fund 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 Global Growth with a short position of Heritage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Growth and Heritage Fund.
Diversification Opportunities for Global Growth and Heritage Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Heritage is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Global Growth Fund and Heritage Fund I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Fund I and Global Growth 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 Global Growth Fund are associated (or correlated) with Heritage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Fund I has no effect on the direction of Global Growth i.e., Global Growth and Heritage Fund go up and down completely randomly.
Pair Corralation between Global Growth and Heritage Fund
Assuming the 90 days horizon Global Growth is expected to generate 1.27 times less return on investment than Heritage Fund. But when comparing it to its historical volatility, Global Growth Fund is 1.35 times less risky than Heritage Fund. It trades about 0.24 of its potential returns per unit of risk. Heritage Fund I is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,671 in Heritage Fund I on May 7, 2025 and sell it today you would earn a total of 379.00 from holding Heritage Fund I or generate 14.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Global Growth Fund vs. Heritage Fund I
Performance |
Timeline |
Global Growth |
Heritage Fund I |
Global Growth and Heritage Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Growth and Heritage Fund
The main advantage of trading using opposite Global Growth and Heritage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Growth position performs unexpectedly, Heritage Fund 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 Heritage Fund will offset losses from the drop in Heritage Fund's long position.Global Growth vs. Emerging Markets Fund | Global Growth vs. International Growth Fund | Global Growth vs. Heritage Fund Investor | Global Growth vs. Select Fund Investor |
Heritage Fund vs. Versatile Bond Portfolio | Heritage Fund vs. Astor Star Fund | Heritage Fund vs. The National Tax Free | Heritage Fund vs. T Rowe Price |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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