Correlation Between Aggressive Growth and Csjxx

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

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

Diversification Opportunities for Aggressive Growth and Csjxx

-0.56

Correlation Coefficient

Aggressive Growth  Csjxx

Excellent diversification

The 3 months correlation between Aggressive and Csjxx is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Portfolio and Csjxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Csjxx and Aggressive Growth 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 Aggressive Growth Portfolio are associated (or correlated) with Csjxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Csjxx has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Csjxx go up and down completely randomly.

Pair Corralation between Aggressive Growth and Csjxx

Assuming the 90 days horizon Aggressive Growth is expected to generate 14.02 times less return on investment than Csjxx. But when comparing it to its historical volatility, Aggressive Growth Portfolio is 22.79 times less risky than Csjxx. It trades about 0.08 of its potential returns per unit of risk. Csjxx is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Csjxx on September 29, 2024 and sell it today you would lose (420.00) from holding Csjxx or give up 80.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Aggressive Growth Portfolio  vs.  Csjxx

Aggressive Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Growth Portfolio are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aggressive Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Csjxx

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Csjxx are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Csjxx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aggressive Growth and Csjxx

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

The idea behind Aggressive Growth Portfolio and Csjxx 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..