Correlation Between Income Growth and International Growth
Can any of the company-specific risk be diversified away by investing in both Income Growth and International Growth 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 Income Growth and International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Growth Fund and International Growth Fund, you can compare the effects of market volatilities on Income Growth and International Growth 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 Income Growth with a short position of International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Growth and International Growth.
Diversification Opportunities for Income Growth and International Growth
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Income and International is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Income Growth Fund and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth and Income 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 Income Growth Fund are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Income Growth i.e., Income Growth and International Growth go up and down completely randomly.
Pair Corralation between Income Growth and International Growth
Assuming the 90 days horizon Income Growth Fund is expected to generate 0.77 times more return on investment than International Growth. However, Income Growth Fund is 1.31 times less risky than International Growth. It trades about 0.16 of its potential returns per unit of risk. International Growth Fund is currently generating about -0.04 per unit of risk. If you would invest 3,644 in Income Growth Fund on June 7, 2025 and sell it today you would earn a total of 220.00 from holding Income Growth Fund or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Growth Fund vs. International Growth Fund
Performance |
| Timeline |
| Income Growth |
| International Growth |
Income Growth and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Growth and International Growth
The main advantage of trading using opposite Income Growth and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Growth position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| Income Growth vs. Mid Cap Value | Income Growth vs. Equity Growth Fund | Income Growth vs. Income Growth Fund | Income Growth vs. Diversified Bond Fund |
| International Growth vs. Doubleline Emerging Markets | International Growth vs. Ep Emerging Markets | International Growth vs. Balanced Strategy Fund | International Growth vs. Siit Emerging Markets |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance |