Correlation Between Us Targeted and Third Avenue
Can any of the company-specific risk be diversified away by investing in both Us Targeted and Third Avenue 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 Us Targeted and Third Avenue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Targeted Value and Third Avenue Small Cap, you can compare the effects of market volatilities on Us Targeted and Third Avenue 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 Us Targeted with a short position of Third Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Targeted and Third Avenue.
Diversification Opportunities for Us Targeted and Third Avenue
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between DFFVX and Third is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Us Targeted Value and Third Avenue Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Avenue Small and Us Targeted 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 Us Targeted Value are associated (or correlated) with Third Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Avenue Small has no effect on the direction of Us Targeted i.e., Us Targeted and Third Avenue go up and down completely randomly.
Pair Corralation between Us Targeted and Third Avenue
Assuming the 90 days horizon Us Targeted Value is expected to generate 1.27 times more return on investment than Third Avenue. However, Us Targeted is 1.27 times more volatile than Third Avenue Small Cap. It trades about 0.18 of its potential returns per unit of risk. Third Avenue Small Cap is currently generating about 0.19 per unit of risk. If you would invest 3,336 in Us Targeted Value on April 29, 2025 and sell it today you would earn a total of 138.00 from holding Us Targeted Value or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Targeted Value vs. Third Avenue Small Cap
Performance |
| Timeline |
| Us Targeted Value |
| Third Avenue Small |
Us Targeted and Third Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Targeted and Third Avenue
The main advantage of trading using opposite Us Targeted and Third Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Targeted position performs unexpectedly, Third Avenue 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 Third Avenue will offset losses from the drop in Third Avenue's long position.| Us Targeted vs. Applied Finance Explorer | Us Targeted vs. Ab Small Cap | Us Targeted vs. Vanguard Small Cap Value | Us Targeted vs. Boston Partners Small |
| Third Avenue vs. Third Avenue Value | Third Avenue vs. Third Avenue Real | Third Avenue vs. Muhlenkamp Fund Institutional | Third Avenue vs. Longleaf Partners Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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