Correlation Between Select Fund and Strategic Allocation:
Can any of the company-specific risk be diversified away by investing in both Select Fund and Strategic Allocation: 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 Fund and Strategic Allocation: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Fund I and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Select Fund and Strategic Allocation: 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 Fund with a short position of Strategic Allocation:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Strategic Allocation:.
Diversification Opportunities for Select Fund and Strategic Allocation:
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Select and Strategic is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund I and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation: and Select 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 Select Fund I are associated (or correlated) with Strategic Allocation:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation: has no effect on the direction of Select Fund i.e., Select Fund and Strategic Allocation: go up and down completely randomly.
Pair Corralation between Select Fund and Strategic Allocation:
Assuming the 90 days horizon Select Fund I is expected to generate 1.75 times more return on investment than Strategic Allocation:. However, Select Fund is 1.75 times more volatile than Strategic Allocation Aggressive. It trades about 0.29 of its potential returns per unit of risk. Strategic Allocation Aggressive is currently generating about 0.31 per unit of risk. If you would invest 11,352 in Select Fund I on April 26, 2025 and sell it today you would earn a total of 2,085 from holding Select Fund I or generate 18.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Select Fund I vs. Strategic Allocation Aggressiv
Performance |
Timeline |
Select Fund I |
Strategic Allocation: |
Select Fund and Strategic Allocation: Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Select Fund and Strategic Allocation:
The main advantage of trading using opposite Select Fund and Strategic Allocation: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Fund position performs unexpectedly, Strategic Allocation: 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 Strategic Allocation: will offset losses from the drop in Strategic Allocation:'s long position.Select Fund vs. Ultra Fund I | Select Fund vs. International Growth Fund | Select Fund vs. Ultra Fund A | Select Fund vs. Value Fund I |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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