Correlation Between World Ex and World Growth
Can any of the company-specific risk be diversified away by investing in both World Ex and World Growth 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 World Ex and World Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Ex Val and World Growth Fund, you can compare the effects of market volatilities on World Ex and World Growth 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 World Ex with a short position of World Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Ex and World Growth.
Diversification Opportunities for World Ex and World Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between World and World is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding World Ex Val and World Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Growth and World Ex 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 World Ex Val are associated (or correlated) with World Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Growth has no effect on the direction of World Ex i.e., World Ex and World Growth go up and down completely randomly.
Pair Corralation between World Ex and World Growth
Assuming the 90 days horizon World Ex Val is expected to generate 0.9 times more return on investment than World Growth. However, World Ex Val is 1.11 times less risky than World Growth. It trades about 0.26 of its potential returns per unit of risk. World Growth Fund is currently generating about 0.09 per unit of risk. If you would invest 1,551 in World Ex Val on May 28, 2025 and sell it today you would earn a total of 57.00 from holding World Ex Val or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
World Ex Val vs. World Growth Fund
Performance |
| Timeline |
| World Ex Val |
| World Growth |
World Ex and World Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Ex and World Growth
The main advantage of trading using opposite World Ex and World Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Ex position performs unexpectedly, World Growth 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 World Growth will offset losses from the drop in World Growth's long position.| World Ex vs. Ultra Short Fixed Income | World Ex vs. Enhanced Fixed Income | World Ex vs. Jhancock Global Equity | World Ex vs. Dodge International Stock |
| World Growth vs. International Fund International | World Growth vs. Emerging Markets Fund | World Growth vs. Science Technology Fund | World Growth vs. Aggressive Growth 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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