Correlation Between Commonwealth Global and Moderately Aggressive
Can any of the company-specific risk be diversified away by investing in both Commonwealth Global and Moderately Aggressive 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 Commonwealth Global and Moderately Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Global Fund and Moderately Aggressive Balanced, you can compare the effects of market volatilities on Commonwealth Global and Moderately Aggressive 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 Commonwealth Global with a short position of Moderately Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Global and Moderately Aggressive.
Diversification Opportunities for Commonwealth Global and Moderately Aggressive
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Commonwealth and Moderately is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Global Fund and Moderately Aggressive Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderately Aggressive and Commonwealth 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 Commonwealth Global Fund are associated (or correlated) with Moderately Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderately Aggressive has no effect on the direction of Commonwealth Global i.e., Commonwealth Global and Moderately Aggressive go up and down completely randomly.
Pair Corralation between Commonwealth Global and Moderately Aggressive
Assuming the 90 days horizon Commonwealth Global is expected to generate 1.83 times less return on investment than Moderately Aggressive. In addition to that, Commonwealth Global is 1.33 times more volatile than Moderately Aggressive Balanced. It trades about 0.03 of its total potential returns per unit of risk. Moderately Aggressive Balanced is currently generating about 0.07 per unit of volatility. If you would invest 1,000.00 in Moderately Aggressive Balanced on April 21, 2025 and sell it today you would earn a total of 258.00 from holding Moderately Aggressive Balanced or generate 25.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Global Fund vs. Moderately Aggressive Balanced
Performance |
| Timeline |
| Commonwealth Global |
| Moderately Aggressive |
Commonwealth Global and Moderately Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Global and Moderately Aggressive
The main advantage of trading using opposite Commonwealth Global and Moderately Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Global position performs unexpectedly, Moderately Aggressive 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 Moderately Aggressive will offset losses from the drop in Moderately Aggressive's long position.The idea behind Commonwealth Global Fund and Moderately Aggressive Balanced 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.
| Moderately Aggressive vs. Aqr Sustainable Long Short | Moderately Aggressive vs. Astor Longshort Fund | Moderately Aggressive vs. Siit Emerging Markets | Moderately Aggressive vs. Doubleline 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |