Correlation Between Aristotle International and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Aristotle International and Aristotle Funds 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 Aristotle International and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle International Equity and Aristotle Funds Series, you can compare the effects of market volatilities on Aristotle International and Aristotle Funds 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 Aristotle International with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle International and Aristotle Funds.
Diversification Opportunities for Aristotle International and Aristotle Funds
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristotle and Aristotle is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle International Equity and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Aristotle International 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 Aristotle International Equity are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Aristotle International i.e., Aristotle International and Aristotle Funds go up and down completely randomly.
Pair Corralation between Aristotle International and Aristotle Funds
Assuming the 90 days horizon Aristotle International Equity is expected to under-perform the Aristotle Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aristotle International Equity is 1.51 times less risky than Aristotle Funds. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Aristotle Funds Series is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,472 in Aristotle Funds Series on September 23, 2024 and sell it today you would lose (30.00) from holding Aristotle Funds Series or give up 2.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aristotle International Equity vs. Aristotle Funds Series
Performance |
Timeline |
Aristotle International |
Aristotle Funds Series |
Aristotle International and Aristotle Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aristotle International and Aristotle Funds
The main advantage of trading using opposite Aristotle International and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle International position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.Aristotle International vs. Semiconductor Ultrasector Profund | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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