Correlation Between Aquila Three and Banking Fund
Can any of the company-specific risk be diversified away by investing in both Aquila Three and Banking Fund 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 Aquila Three and Banking Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquila Three Peaks and Banking Fund Class, you can compare the effects of market volatilities on Aquila Three and Banking Fund 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 Aquila Three with a short position of Banking Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquila Three and Banking Fund.
Diversification Opportunities for Aquila Three and Banking Fund
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aquila and Banking is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aquila Three Peaks and Banking Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banking Fund Class and Aquila Three 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 Aquila Three Peaks are associated (or correlated) with Banking Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banking Fund Class has no effect on the direction of Aquila Three i.e., Aquila Three and Banking Fund go up and down completely randomly.
Pair Corralation between Aquila Three and Banking Fund
Assuming the 90 days horizon Aquila Three is expected to generate 11.59 times less return on investment than Banking Fund. But when comparing it to its historical volatility, Aquila Three Peaks is 7.3 times less risky than Banking Fund. It trades about 0.19 of its potential returns per unit of risk. Banking Fund Class is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 9,583 in Banking Fund Class on June 12, 2025 and sell it today you would earn a total of 687.00 from holding Banking Fund Class or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquila Three Peaks vs. Banking Fund Class
Performance |
| Timeline |
| Aquila Three Peaks |
| Banking Fund Class |
Aquila Three and Banking Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquila Three and Banking Fund
The main advantage of trading using opposite Aquila Three and Banking Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquila Three position performs unexpectedly, Banking Fund 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 Banking Fund will offset losses from the drop in Banking Fund's long position.| Aquila Three vs. Vanguard High Yield Corporate | Aquila Three vs. Blackrock Hi Yld | Aquila Three vs. Blackrock Hi Yld | Aquila Three vs. American High Income |
| Banking Fund vs. Calvert Global Energy | Banking Fund vs. Jennison Natural Resources | Banking Fund vs. Fidelity Advisor Energy | Banking Fund vs. Icon Natural Resources |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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