Correlation Between California Long-term and Growth Fund

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Can any of the company-specific risk be diversified away by investing in both California Long-term and Growth 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 California Long-term and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Long Term Tax Free and Growth Fund Of, you can compare the effects of market volatilities on California Long-term and Growth 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 California Long-term with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Long-term and Growth Fund.

Diversification Opportunities for California Long-term and Growth Fund

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between California and Growth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CALIFORNIA LONG-TERM TAX-FREE and GROWTH FUND OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and California Long-term 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 California Long Term Tax Free are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of California Long-term i.e., California Long-term and Growth Fund go up and down completely randomly.

Pair Corralation between California Long-term and Growth Fund

If you would invest  5,016  in Growth Fund Of on December 30, 2023 and sell it today you would earn a total of  1,174  from holding Growth Fund Of or generate 23.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

CALIFORNIA LONG-TERM TAX-FREE  vs.  GROWTH FUND OF

 Performance 
       Timeline  
California Long-term 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days California Long Term Tax Free has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, California Long-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Growth Fund 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Of are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Growth Fund showed solid returns over the last few months and may actually be approaching a breakup point.

California Long-term and Growth Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with California Long-term and Growth Fund

The main advantage of trading using opposite California Long-term and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Long-term position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.
The idea behind California Long Term Tax Free and Growth Fund Of 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.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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