Correlation Between Growth Allocation and Six Circles
Can any of the company-specific risk be diversified away by investing in both Growth Allocation and Six Circles 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 Allocation and Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Allocation Fund and Six Circles Credit, you can compare the effects of market volatilities on Growth Allocation and Six Circles 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 Allocation with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Allocation and Six Circles.
Diversification Opportunities for Growth Allocation and Six Circles
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and Six is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Fund and Six Circles Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Credit and Growth Allocation 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 Allocation Fund are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Credit has no effect on the direction of Growth Allocation i.e., Growth Allocation and Six Circles go up and down completely randomly.
Pair Corralation between Growth Allocation and Six Circles
Assuming the 90 days horizon Growth Allocation Fund is expected to generate 4.55 times more return on investment than Six Circles. However, Growth Allocation is 4.55 times more volatile than Six Circles Credit. It trades about 0.22 of its potential returns per unit of risk. Six Circles Credit is currently generating about 0.54 per unit of risk. If you would invest 1,325 in Growth Allocation Fund on May 27, 2025 and sell it today you would earn a total of 86.00 from holding Growth Allocation Fund or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Allocation Fund vs. Six Circles Credit
Performance |
| Timeline |
| Growth Allocation |
| Six Circles Credit |
Growth Allocation and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Allocation and Six Circles
The main advantage of trading using opposite Growth Allocation and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Growth Allocation vs. Eagle Small Cap | Growth Allocation vs. Guidemark Smallmid Cap | Growth Allocation vs. Omni Small Cap Value | Growth Allocation vs. Artisan Small Cap |
| Six Circles vs. Guidemark Large Cap | Six Circles vs. Qs Global Equity | Six Circles vs. Tax Managed Large Cap | Six Circles vs. Growth Allocation 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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