Correlation Between Pioneer Equity and Disciplined Value

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

By analyzing existing cross correlation between Pioneer Equity Income and Disciplined Value Series, you can compare the effects of market volatilities on Pioneer Equity and Disciplined Value 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 Pioneer Equity with a short position of Disciplined Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Equity and Disciplined Value.

Diversification Opportunities for Pioneer Equity and Disciplined Value

-0.13

Correlation Coefficient

Pioneer Equity  Disciplined Value

Good diversification

The 3 months correlation between Pioneer and Disciplined is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Equity Income and Disciplined Value Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Disciplined Value Series and Pioneer Equity 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 Pioneer Equity Income are associated (or correlated) with Disciplined Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Disciplined Value Series has no effect on the direction of Pioneer Equity i.e., Pioneer Equity and Disciplined Value go up and down completely randomly.

Pair Corralation between Pioneer Equity and Disciplined Value

Assuming the 90 days horizon Pioneer Equity Income is expected to under-perform the Disciplined Value. In addition to that, Pioneer Equity is 4.51 times more volatile than Disciplined Value Series. It trades about -0.09 of its total potential returns per unit of risk. Disciplined Value Series is currently generating about 0.11 per unit of volatility. If you would invest  868.00  in Disciplined Value Series on September 12, 2024 and sell it today you would earn a total of  47.00  from holding Disciplined Value Series or generate 5.41% return on investment over 90 days.

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

Pioneer Equity Income  vs.  Disciplined Value Series

Pioneer Equity Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneer Equity Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Disciplined Value Series

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Disciplined Value Series are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Disciplined Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pioneer Equity and Disciplined Value

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

The idea behind Pioneer Equity Income and Disciplined Value Series 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.