Correlation Between Income Growth and One Choice

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Income Growth and One Choice 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 Income Growth and One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Growth Fund and One Choice In, you can compare the effects of market volatilities on Income Growth and One Choice 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 Income Growth with a short position of One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Growth and One Choice.

Diversification Opportunities for Income Growth and One Choice

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Income and One is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Income Growth Fund and One Choice In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice In and Income 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 Income Growth Fund are associated (or correlated) with One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice In has no effect on the direction of Income Growth i.e., Income Growth and One Choice go up and down completely randomly.

Pair Corralation between Income Growth and One Choice

Assuming the 90 days horizon Income Growth Fund is expected to under-perform the One Choice. In addition to that, Income Growth is 1.76 times more volatile than One Choice In. It trades about -0.28 of its total potential returns per unit of risk. One Choice In is currently generating about -0.31 per unit of volatility. If you would invest  1,225  in One Choice In on January 20, 2024 and sell it today you would lose (32.00) from holding One Choice In or give up 2.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Income Growth Fund  vs.  One Choice In

 Performance 
       Timeline  
Income Growth 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Income Growth Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Income Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
One Choice In 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days One Choice In has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, One Choice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Income Growth and One Choice Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Income Growth and One Choice

The main advantage of trading using opposite Income Growth and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Growth position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.
The idea behind Income Growth Fund and One Choice In 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Transaction History
View history of all your transactions and understand their impact on performance
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories