Correlation Between Growth Equity and Zevenbergen Genea

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

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

Diversification Opportunities for Growth Equity and Zevenbergen Genea

0.93

Correlation Coefficient

Growth Equity  Zevenbergen Genea

Almost no diversification

The 3 months correlation between Growth and Zevenbergen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding The Growth Equity and Zevenbergen Genea Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zevenbergen Genea and Growth Equity 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 The Growth Equity are associated (or correlated) with Zevenbergen Genea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zevenbergen Genea has no effect on the direction of Growth Equity i.e., Growth Equity and Zevenbergen Genea go up and down completely randomly.

Pair Corralation between Growth Equity and Zevenbergen Genea

Assuming the 90 days horizon The Growth Equity is expected to under-perform the Zevenbergen Genea. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Growth Equity is 1.75 times less risky than Zevenbergen Genea. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Zevenbergen Genea Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,333  in Zevenbergen Genea Fund on September 27, 2024 and sell it today you would earn a total of  2.00  from holding Zevenbergen Genea Fund or generate 0.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

The Growth Equity  vs.  Zevenbergen Genea Fund

Growth Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Growth Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Growth Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zevenbergen Genea

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zevenbergen Genea Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Zevenbergen Genea showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Growth Equity and Zevenbergen Genea

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

The idea behind The Growth Equity and Zevenbergen Genea Fund 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.