Correlation Between Sound Shore and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Sound Shore and Growth Fund 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 Sound Shore and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sound Shore Fund and Growth Fund Of, you can compare the effects of market volatilities on Sound Shore and Growth Fund 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 Sound Shore with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sound Shore and Growth Fund.
Diversification Opportunities for Sound Shore and Growth Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sound and Growth is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sound Shore Fund and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Sound Shore 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 Sound Shore Fund are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Sound Shore i.e., Sound Shore and Growth Fund go up and down completely randomly.
Pair Corralation between Sound Shore and Growth Fund
Assuming the 90 days horizon Sound Shore is expected to generate 1.25 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Sound Shore Fund is 1.02 times less risky than Growth Fund. It trades about 0.2 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 7,590 in Growth Fund Of on May 30, 2025 and sell it today you would earn a total of 909.00 from holding Growth Fund Of or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Sound Shore Fund vs. Growth Fund Of
Performance |
| Timeline |
| Sound Shore Fund |
| Growth Fund |
Sound Shore and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sound Shore and Growth Fund
The main advantage of trading using opposite Sound Shore and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sound Shore position performs unexpectedly, Growth Fund 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 Fund will offset losses from the drop in Growth Fund's long position.| Sound Shore vs. T Rowe Price | Sound Shore vs. Mh Elite Fund | Sound Shore vs. Fm Investments Large | Sound Shore vs. Old Westbury Large |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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