Correlation Between Issachar Fund and Innealta Capital

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

By analyzing existing cross correlation between Issachar Fund Class and Innealta Capital Sector, you can compare the effects of market volatilities on Issachar Fund and Innealta Capital 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 Issachar Fund with a short position of Innealta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Issachar Fund and Innealta Capital.

Diversification Opportunities for Issachar Fund and Innealta Capital

0.77

Correlation Coefficient

Issachar Fund  Innealta Capital

Poor diversification

The 3 months correlation between Issachar and Innealta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and Innealta Capital Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innealta Capital Sector and Issachar 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 Issachar Fund Class are associated (or correlated) with Innealta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innealta Capital Sector has no effect on the direction of Issachar Fund i.e., Issachar Fund and Innealta Capital go up and down completely randomly.

Pair Corralation between Issachar Fund and Innealta Capital

Assuming the 90 days horizon Issachar Fund Class is expected to generate 1.39 times more return on investment than Innealta Capital. However, Issachar Fund is 1.39 times more volatile than Innealta Capital Sector. It trades about 0.2 of its potential returns per unit of risk. Innealta Capital Sector is currently generating about 0.08 per unit of risk. If you would invest  925.00  in Issachar Fund Class on September 12, 2024 and sell it today you would earn a total of  101.00  from holding Issachar Fund Class or generate 10.92% return on investment over 90 days.

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

Issachar Fund Class  vs.  Innealta Capital Sector

Issachar Fund Class

Risk-Adjusted Performance

15 of 100

Solid

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

Innealta Capital Sector

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innealta Capital Sector are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Innealta Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Issachar Fund and Innealta Capital

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

The idea behind Issachar Fund Class and Innealta Capital Sector 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.