Correlation Between Pacific Funds and College Retirement
Can any of the company-specific risk be diversified away by investing in both Pacific Funds and College Retirement 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 Pacific Funds and College Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds Small Cap and College Retirement Equities, you can compare the effects of market volatilities on Pacific Funds and College Retirement 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 Pacific Funds with a short position of College Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and College Retirement.
Diversification Opportunities for Pacific Funds and College Retirement
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and College is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds Small Cap and College Retirement Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on College Retirement and Pacific Funds 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 Pacific Funds Small Cap are associated (or correlated) with College Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of College Retirement has no effect on the direction of Pacific Funds i.e., Pacific Funds and College Retirement go up and down completely randomly.
Pair Corralation between Pacific Funds and College Retirement
If you would invest 52,239 in College Retirement Equities on September 11, 2024 and sell it today you would earn a total of 1,199 from holding College Retirement Equities or generate 2.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 5.0% |
Values | Daily Returns |
Pacific Funds Small Cap vs. College Retirement Equities
Performance |
Timeline |
Pacific Funds Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
College Retirement |
Pacific Funds and College Retirement Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pacific Funds and College Retirement
The main advantage of trading using opposite Pacific Funds and College Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds position performs unexpectedly, College Retirement 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 College Retirement will offset losses from the drop in College Retirement's long position.Pacific Funds vs. Morningstar Municipal Bond | Pacific Funds vs. California High Yield Municipal | Pacific Funds vs. Old Westbury Municipal | Pacific Funds vs. Intermediate Term Tax Free Bond |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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