Correlation Between Us Global and Intech Managed

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

By analyzing existing cross correlation between Us Global Leaders and Intech Managed Volatility, you can compare the effects of market volatilities on Us Global and Intech Managed 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 Us Global with a short position of Intech Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Intech Managed.

Diversification Opportunities for Us Global and Intech Managed

0.66

Correlation Coefficient

Us Global  Intech Managed

Poor diversification

The 3 months correlation between USLIX and Intech is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Leaders and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility and Us Global 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 Us Global Leaders are associated (or correlated) with Intech Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of Us Global i.e., Us Global and Intech Managed go up and down completely randomly.

Pair Corralation between Us Global and Intech Managed

Assuming the 90 days horizon Us Global Leaders is expected to under-perform the Intech Managed. In addition to that, Us Global is 2.57 times more volatile than Intech Managed Volatility. It trades about -0.22 of its total potential returns per unit of risk. Intech Managed Volatility is currently generating about -0.13 per unit of volatility. If you would invest  1,201  in Intech Managed Volatility on September 26, 2024 and sell it today you would lose (35.00) from holding Intech Managed Volatility or give up 2.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Us Global Leaders  vs.  Intech Managed Volatility

Us Global Leaders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Us Global Leaders has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Intech Managed Volatility

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intech Managed Volatility are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intech Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Us Global and Intech Managed

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

The idea behind Us Global Leaders and Intech Managed Volatility 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..