Correlation Between Europacific Growth and Eafe Fund
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Eafe 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 Europacific Growth and Eafe Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and The Eafe Fund, you can compare the effects of market volatilities on Europacific Growth and Eafe 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 Europacific Growth with a short position of Eafe Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Eafe Fund.
Diversification Opportunities for Europacific Growth and Eafe Fund
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Europacific and Eafe is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and The Eafe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Fund and Europacific 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 Europacific Growth Fund are associated (or correlated) with Eafe Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Fund has no effect on the direction of Europacific Growth i.e., Europacific Growth and Eafe Fund go up and down completely randomly.
Pair Corralation between Europacific Growth and Eafe Fund
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.76 times more return on investment than Eafe Fund. However, Europacific Growth Fund is 1.32 times less risky than Eafe Fund. It trades about 0.2 of its potential returns per unit of risk. The Eafe Fund is currently generating about 0.12 per unit of risk. If you would invest 5,533 in Europacific Growth Fund on May 2, 2025 and sell it today you would earn a total of 446.00 from holding Europacific Growth Fund or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. The Eafe Fund
Performance |
| Timeline |
| Europacific Growth |
| Eafe Fund |
Europacific Growth and Eafe Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Eafe Fund
The main advantage of trading using opposite Europacific Growth and Eafe Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Eafe 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 Eafe Fund will offset losses from the drop in Eafe Fund's long position.| Europacific Growth vs. Pender Real Estate | Europacific Growth vs. Vanguard Reit Index | Europacific Growth vs. Fidelity Real Estate | Europacific Growth vs. Dfa Real Estate |
| Eafe Fund vs. Small Cap Stock | Eafe Fund vs. Allianzgi Diversified Income | Eafe Fund vs. Madison Diversified Income | Eafe Fund vs. Lord Abbett Diversified |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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