Correlation Between Princeton Fund and IShares Russell

Can any of the company-specific risk be diversified away by investing in both Princeton Fund and IShares Russell 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 Princeton Fund and IShares Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Princeton Fund Advisors and iShares Russell 1000, you can compare the effects of market volatilities on Princeton Fund and IShares Russell 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 Princeton Fund with a short position of IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Princeton Fund and IShares Russell.

Diversification Opportunities for Princeton Fund and IShares Russell

0.73

Correlation Coefficient

Princeton Fund  IShares Russell

Poor diversification

The 3 months correlation between Princeton and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Princeton Fund Advisors and iShares Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Russell 1000 and Princeton Fund 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 Princeton Fund Advisors are associated (or correlated) with IShares Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Russell 1000 has no effect on the direction of Princeton Fund i.e., Princeton Fund and IShares Russell go up and down completely randomly.

Pair Corralation between Princeton Fund and IShares Russell

If you would invest  39,391  in iShares Russell 1000 on September 24, 2024 and sell it today you would earn a total of  1,754  from holding iShares Russell 1000 or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Princeton Fund Advisors  vs.  iShares Russell 1000

Princeton Fund Advisors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Princeton Fund Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Princeton Fund is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

iShares Russell 1000

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Russell 1000 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, IShares Russell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Princeton Fund and IShares Russell

The main advantage of trading using opposite Princeton Fund and IShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Princeton Fund position performs unexpectedly, IShares Russell 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 IShares Russell will offset losses from the drop in IShares Russell's long position.

The idea behind Princeton Fund Advisors and iShares Russell 1000 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.