Correlation Between Aristotle International and Aristotle Funds

Specify exactly 2 symbols:
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

AristotleAristotleDiversified AwayAristotleAristotleDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Aristotle International Equity  vs.  Aristotle Funds Series

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -4-202468
JavaScript chart by amCharts 3.21.15AIFFX ARILX
       Timeline  
Aristotle International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aristotle International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Aristotle International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec13.81414.214.414.614.81515.2
Aristotle Funds Series 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Aristotle Funds Series are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Aristotle Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1414.214.414.614.815

Aristotle International and Aristotle Funds Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.28-0.96-0.64-0.32-0.05360.09660.410.731.051.37 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15AIFFX ARILX
       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.
The idea behind Aristotle International Equity and Aristotle Funds Series 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
CEOs Directory
Screen CEOs from public companies around the world
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories