Correlation Between Perkins Mid and Growth Fund

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

Diversification Opportunities for Perkins Mid and Growth Fund

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Perkins and Growth is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Mid Cap and Growth Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund Investor and Perkins Mid 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 Perkins Mid Cap 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 Investor has no effect on the direction of Perkins Mid i.e., Perkins Mid and Growth Fund go up and down completely randomly.

Pair Corralation between Perkins Mid and Growth Fund

Assuming the 90 days horizon Perkins Mid Cap is expected to under-perform the Growth Fund. In addition to that, Perkins Mid is 1.12 times more volatile than Growth Fund Investor. It trades about -0.26 of its total potential returns per unit of risk. Growth Fund Investor is currently generating about 0.3 per unit of volatility. If you would invest  5,512  in Growth Fund Investor on March 16, 2024 and sell it today you would earn a total of  245.00  from holding Growth Fund Investor or generate 4.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy90.91%
ValuesDaily Returns

Perkins Mid Cap  vs.  Growth Fund Investor

 Performance 
       Timeline  
Perkins Mid Cap 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Investor are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Perkins Mid and Growth Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perkins Mid and Growth Fund

The main advantage of trading using opposite Perkins Mid and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perkins Mid 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 Perkins Mid Cap and Growth Fund Investor 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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