Correlation Between Scharf Fund and Vanguard New
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Vanguard New 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 Scharf Fund and Vanguard New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Vanguard New Jersey, you can compare the effects of market volatilities on Scharf Fund and Vanguard New 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 Scharf Fund with a short position of Vanguard New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Vanguard New.
Diversification Opportunities for Scharf Fund and Vanguard New
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scharf and Vanguard is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Vanguard New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard New Jersey and Scharf 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 Scharf Fund Retail are associated (or correlated) with Vanguard New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard New Jersey has no effect on the direction of Scharf Fund i.e., Scharf Fund and Vanguard New go up and down completely randomly.
Pair Corralation between Scharf Fund and Vanguard New
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 2.08 times more return on investment than Vanguard New. However, Scharf Fund is 2.08 times more volatile than Vanguard New Jersey. It trades about 0.09 of its potential returns per unit of risk. Vanguard New Jersey is currently generating about 0.05 per unit of risk. If you would invest 5,426 in Scharf Fund Retail on September 12, 2024 and sell it today you would earn a total of 165.00 from holding Scharf Fund Retail or generate 3.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Scharf Fund Retail vs. Vanguard New Jersey
Performance |
Timeline |
Scharf Fund Retail |
Vanguard New Jersey |
Scharf Fund and Vanguard New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scharf Fund and Vanguard New
The main advantage of trading using opposite Scharf Fund and Vanguard New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Vanguard New 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 Vanguard New will offset losses from the drop in Vanguard New's long position.Scharf Fund vs. Gmo Resources | Scharf Fund vs. Icon Natural Resources | Scharf Fund vs. Fidelity Advisor Energy | Scharf Fund vs. Oil Gas Ultrasector |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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