Correlation Between Growth Fund and Slow Capital
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Slow Capital 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 Growth Fund and Slow Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Slow Capital Growth, you can compare the effects of market volatilities on Growth Fund and Slow Capital 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 Growth Fund with a short position of Slow Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Slow Capital.
Diversification Opportunities for Growth Fund and Slow Capital
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Slow is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Slow Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slow Capital Growth and Growth Fund 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 Growth Fund Of are associated (or correlated) with Slow Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slow Capital Growth has no effect on the direction of Growth Fund i.e., Growth Fund and Slow Capital go up and down completely randomly.
Pair Corralation between Growth Fund and Slow Capital
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.9 times more return on investment than Slow Capital. However, Growth Fund Of is 1.11 times less risky than Slow Capital. It trades about 0.14 of its potential returns per unit of risk. Slow Capital Growth is currently generating about -0.07 per unit of risk. If you would invest 6,581 in Growth Fund Of on March 25, 2025 and sell it today you would earn a total of 98.00 from holding Growth Fund Of or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Slow Capital Growth
Performance |
| Timeline |
| Growth Fund |
| Slow Capital Growth |
Growth Fund and Slow Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Slow Capital
The main advantage of trading using opposite Growth Fund and Slow Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Slow Capital 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 Slow Capital will offset losses from the drop in Slow Capital's long position.| Growth Fund vs. Goldman Sachs Government | Growth Fund vs. Rbc Funds Trust | Growth Fund vs. Baird Quality Intermediate | Growth Fund vs. Us Government Securities |
| Slow Capital vs. Principal Lifetime Hybrid | Slow Capital vs. Fulcrum Diversified Absolute | Slow Capital vs. Intermediate Term Bond Fund | Slow Capital vs. Aqr Diversified Arbitrage |
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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