Correlation Between Homestead Rural and Growth Fund

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

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

Diversification Opportunities for Homestead Rural and Growth Fund

0.0

Correlation Coefficient

Homestead Rural  Growth Fund

Pay attention - limited upside

The 3 months correlation between Homestead and Growth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Homestead Rural America and Growth Fund Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund Growth and Homestead Rural 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 Homestead Rural America are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund Growth has no effect on the direction of Homestead Rural i.e., Homestead Rural and Growth Fund go up and down completely randomly.

Pair Corralation between Homestead Rural and Growth Fund

If you would invest  1,821  in Growth Fund Growth on September 15, 2024 and sell it today you would earn a total of  200.00  from holding Growth Fund Growth or generate 10.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Homestead Rural America  vs.  Growth Fund Growth

Homestead Rural America

Risk-Adjusted Performance

0 of 100

Very Weak

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

Growth Fund Growth

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Homestead Rural and Growth Fund

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

The idea behind Homestead Rural America and Growth Fund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.