Correlation Between Profunds-large Cap and Short Precious
Can any of the company-specific risk be diversified away by investing in both Profunds-large Cap and Short Precious 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 Profunds-large Cap and Short Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Large Cap Growth and Short Precious Metals, you can compare the effects of market volatilities on Profunds-large Cap and Short Precious 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 Profunds-large Cap with a short position of Short Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds-large Cap and Short Precious.
Diversification Opportunities for Profunds-large Cap and Short Precious
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Profunds-large and Short is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals and Profunds-large Cap 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 Profunds Large Cap Growth are associated (or correlated) with Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of Profunds-large Cap i.e., Profunds-large Cap and Short Precious go up and down completely randomly.
Pair Corralation between Profunds-large Cap and Short Precious
Assuming the 90 days horizon Profunds Large Cap Growth is expected to generate 0.36 times more return on investment than Short Precious. However, Profunds Large Cap Growth is 2.8 times less risky than Short Precious. It trades about 0.12 of its potential returns per unit of risk. Short Precious Metals is currently generating about -0.13 per unit of risk. If you would invest 3,885 in Profunds Large Cap Growth on August 30, 2025 and sell it today you would earn a total of 305.00 from holding Profunds Large Cap Growth or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Short Precious Metals
Performance |
| Timeline |
| Profunds Large Cap |
| Short Precious Metals |
Profunds-large Cap and Short Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds-large Cap and Short Precious
The main advantage of trading using opposite Profunds-large Cap and Short Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds-large Cap position performs unexpectedly, Short Precious 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 Short Precious will offset losses from the drop in Short Precious' long position.| Profunds-large Cap vs. Inflation Adjusted Bond Fund | Profunds-large Cap vs. Lincoln Inflation Plus | Profunds-large Cap vs. Ab Municipal Bond | Profunds-large Cap vs. Guggenheim Managed Futures |
| Short Precious vs. Angel Oak Ultrashort | Short Precious vs. Blackrock Global Longshort | Short Precious vs. Alpine Ultra Short | Short Precious vs. Quantitative Longshort Equity |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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