Correlation Between Europacific Growth and Ellomay Capital
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Ellomay Capital 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 Europacific Growth and Ellomay Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Ellomay Capital, you can compare the effects of market volatilities on Europacific Growth and Ellomay Capital 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 Europacific Growth with a short position of Ellomay Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Ellomay Capital.
Diversification Opportunities for Europacific Growth and Ellomay Capital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Europacific and Ellomay is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Ellomay Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellomay Capital and Europacific 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 Europacific Growth Fund are associated (or correlated) with Ellomay Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellomay Capital has no effect on the direction of Europacific Growth i.e., Europacific Growth and Ellomay Capital go up and down completely randomly.
Pair Corralation between Europacific Growth and Ellomay Capital
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.27 times more return on investment than Ellomay Capital. However, Europacific Growth Fund is 3.73 times less risky than Ellomay Capital. It trades about -0.35 of its potential returns per unit of risk. Ellomay Capital is currently generating about -0.11 per unit of risk. If you would invest 5,888 in Europacific Growth Fund on January 20, 2024 and sell it today you would lose (233.00) from holding Europacific Growth Fund or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Europacific Growth Fund vs. Ellomay Capital
Performance |
| Timeline |
| Europacific Growth |
| Ellomay Capital |
Europacific Growth and Ellomay Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Ellomay Capital
The main advantage of trading using opposite Europacific Growth and Ellomay Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Ellomay Capital 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 Ellomay Capital will offset losses from the drop in Ellomay Capital's long position.| Europacific Growth vs. Income Fund Of | Europacific Growth vs. New World Fund | Europacific Growth vs. American Mutual Fund | Europacific Growth vs. American Mutual Fund |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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