Correlation Between Fa 529 and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Fa 529 and Growth Allocation 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 Fa 529 and Growth Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Growth Allocation Fund, you can compare the effects of market volatilities on Fa 529 and Growth Allocation 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 Fa 529 with a short position of Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Growth Allocation.
Diversification Opportunities for Fa 529 and Growth Allocation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FFCGX and Growth is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation and Fa 529 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 Fa 529 Aggressive are associated (or correlated) with Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Fa 529 i.e., Fa 529 and Growth Allocation go up and down completely randomly.
Pair Corralation between Fa 529 and Growth Allocation
Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 1.28 times more return on investment than Growth Allocation. However, Fa 529 is 1.28 times more volatile than Growth Allocation Fund. It trades about 0.16 of its potential returns per unit of risk. Growth Allocation Fund is currently generating about 0.18 per unit of risk. If you would invest 4,261 in Fa 529 Aggressive on June 7, 2025 and sell it today you would earn a total of 266.00 from holding Fa 529 Aggressive or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Growth Allocation Fund
Performance |
| Timeline |
| Fa 529 Aggressive |
| Growth Allocation |
Risk-Adjusted Performance
Good
Weak | Strong |
Fa 529 and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Growth Allocation
The main advantage of trading using opposite Fa 529 and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Fa 529 vs. Rationalpier 88 Convertible | Fa 529 vs. Gabelli Convertible And | Fa 529 vs. Putnam Convertible Securities | Fa 529 vs. Calamos Dynamic Convertible |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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