Correlation Between Scout Core and Long Term
Can any of the company-specific risk be diversified away by investing in both Scout Core and Long Term 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 Scout Core and Long Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout E Bond and Long Term Government Fund, you can compare the effects of market volatilities on Scout Core and Long Term 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 Scout Core with a short position of Long Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Core and Long Term.
Diversification Opportunities for Scout Core and Long Term
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scout and Long is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Scout E Bond and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government and Scout Core 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 Scout E Bond are associated (or correlated) with Long Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Scout Core i.e., Scout Core and Long Term go up and down completely randomly.
Pair Corralation between Scout Core and Long Term
Assuming the 90 days horizon Scout E Bond is expected to generate 0.44 times more return on investment than Long Term. However, Scout E Bond is 2.25 times less risky than Long Term. It trades about 0.1 of its potential returns per unit of risk. Long Term Government Fund is currently generating about 0.02 per unit of risk. If you would invest 1,047 in Scout E Bond on April 19, 2025 and sell it today you would earn a total of 21.00 from holding Scout E Bond or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout E Bond vs. Long Term Government Fund
Performance |
| Timeline |
| Scout E Bond |
| Long Term Government |
Scout Core and Long Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Core and Long Term
The main advantage of trading using opposite Scout Core and Long Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Core position performs unexpectedly, Long Term 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 Long Term will offset losses from the drop in Long Term's long position.| Scout Core vs. Auer Growth Fund | Scout Core vs. Qs Growth Fund | Scout Core vs. Qs Moderate Growth | Scout Core vs. Pace Large Growth |
| Long Term vs. Ultrasmall Cap Profund Ultrasmall Cap | Long Term vs. Applied Finance Explorer | Long Term vs. Vanguard Small Cap Value | Long Term vs. Mid Cap Growth Profund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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