Correlation Between Bear Profund and Large-cap Growth

Can any of the company-specific risk be diversified away by investing in both Bear Profund and Large-cap Growth 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 Bear Profund and Large-cap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bear Profund Bear and Large Cap Growth Profund, you can compare the effects of market volatilities on Bear Profund and Large-cap Growth 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 Bear Profund with a short position of Large-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bear Profund and Large-cap Growth.

Diversification Opportunities for Bear Profund and Large-cap Growth

-0.99

Correlation Coefficient

Bear Profund  Large-cap Growth

Pay attention - limited upside

The 3 months correlation between Bear and Large-cap is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bear Profund Bear and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Growth and Bear Profund 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 Bear Profund Bear are associated (or correlated) with Large-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Bear Profund i.e., Bear Profund and Large-cap Growth go up and down completely randomly.

Pair Corralation between Bear Profund and Large-cap Growth

Assuming the 90 days horizon Bear Profund Bear is expected to under-perform the Large-cap Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bear Profund Bear is 1.39 times less risky than Large-cap Growth. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Large Cap Growth Profund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,196  in Large Cap Growth Profund on August 30, 2024 and sell it today you would earn a total of  287.00  from holding Large Cap Growth Profund or generate 6.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bear Profund Bear  vs.  Large Cap Growth Profund

Bear Profund Bear

Risk-Adjusted Performance

0 of 100

Very Weak

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

Large Cap Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap Growth Profund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Large-cap Growth may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Bear Profund and Large-cap Growth

The main advantage of trading using opposite Bear Profund and Large-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bear Profund position performs unexpectedly, Large-cap Growth 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 Large-cap Growth will offset losses from the drop in Large-cap Growth's long position.

The idea behind Bear Profund Bear and Large Cap Growth Profund 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.