Correlation Between Balanced Fund and Stadion Tactical

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

By analyzing existing cross correlation between Balanced Fund Retail and Stadion Tactical Growth, you can compare the effects of market volatilities on Balanced Fund and Stadion Tactical 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 Balanced Fund with a short position of Stadion Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Stadion Tactical.

Diversification Opportunities for Balanced Fund and Stadion Tactical

0.19

Correlation Coefficient

Balanced Fund  Stadion Tactical

Average diversification

The 3 months correlation between Balanced and Stadion is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Stadion Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stadion Tactical Growth and Balanced 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 Balanced Fund Retail are associated (or correlated) with Stadion Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stadion Tactical Growth has no effect on the direction of Balanced Fund i.e., Balanced Fund and Stadion Tactical go up and down completely randomly.

Pair Corralation between Balanced Fund and Stadion Tactical

Assuming the 90 days horizon Balanced Fund Retail is expected to under-perform the Stadion Tactical. In addition to that, Balanced Fund is 2.14 times more volatile than Stadion Tactical Growth. It trades about -0.11 of its total potential returns per unit of risk. Stadion Tactical Growth is currently generating about 0.01 per unit of volatility. If you would invest  1,462  in Stadion Tactical Growth on September 29, 2024 and sell it today you would earn a total of  4.00  from holding Stadion Tactical Growth or generate 0.27% return on investment over 90 days.

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

Balanced Fund Retail  vs.  Stadion Tactical Growth

Balanced Fund Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balanced Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Stadion Tactical Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Balanced Fund and Stadion Tactical

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

The idea behind Balanced Fund Retail and Stadion Tactical Growth 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.