Correlation Between Bruce Fund and Domini International

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

By analyzing existing cross correlation between Bruce Fund Bruce and Domini International Opportunities, you can compare the effects of market volatilities on Bruce Fund and Domini International 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 Bruce Fund with a short position of Domini International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bruce Fund and Domini International.

Diversification Opportunities for Bruce Fund and Domini International

0.72

Correlation Coefficient

Bruce Fund  Domini International

Poor diversification

The 3 months correlation between Bruce and Domini is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bruce Fund Bruce and Domini International Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domini International and Bruce 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 Bruce Fund Bruce are associated (or correlated) with Domini International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domini International has no effect on the direction of Bruce Fund i.e., Bruce Fund and Domini International go up and down completely randomly.

Pair Corralation between Bruce Fund and Domini International

Assuming the 90 days horizon Bruce Fund Bruce is expected to generate 0.63 times more return on investment than Domini International. However, Bruce Fund Bruce is 1.58 times less risky than Domini International. It trades about 0.0 of its potential returns per unit of risk. Domini International Opportunities is currently generating about -0.08 per unit of risk. If you would invest  54,218  in Bruce Fund Bruce on September 4, 2024 and sell it today you would lose (41.00) from holding Bruce Fund Bruce or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Bruce Fund Bruce  vs.  Domini International Opportuni

Bruce Fund Bruce

Risk-Adjusted Performance

0 of 100

Very Weak

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

Domini International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bruce Fund and Domini International

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

The idea behind Bruce Fund Bruce and Domini International Opportunities 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.