Correlation Between World Growth and World Core
Can any of the company-specific risk be diversified away by investing in both World Growth and World Core 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 World Growth and World Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Growth Fund and World Core Equity, you can compare the effects of market volatilities on World Growth and World Core 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 World Growth with a short position of World Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Growth and World Core.
Diversification Opportunities for World Growth and World Core
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between World and World is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding World Growth Fund and World Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Core Equity and World Growth 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 World Growth Fund are associated (or correlated) with World Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Core Equity has no effect on the direction of World Growth i.e., World Growth and World Core go up and down completely randomly.
Pair Corralation between World Growth and World Core
Assuming the 90 days horizon World Growth is expected to generate 1.11 times less return on investment than World Core. But when comparing it to its historical volatility, World Growth Fund is 1.02 times less risky than World Core. It trades about 0.18 of its potential returns per unit of risk. World Core Equity is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,545 in World Core Equity on June 5, 2025 and sell it today you would earn a total of 195.00 from holding World Core Equity or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Growth Fund vs. World Core Equity
Performance |
| Timeline |
| World Growth |
| World Core Equity |
World Growth and World Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Growth and World Core
The main advantage of trading using opposite World Growth and World Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Growth position performs unexpectedly, World Core 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 World Core will offset losses from the drop in World Core's long position.| World Growth vs. Sp 500 Index | World Growth vs. Virginia Bond Fund | World Growth vs. Growth Fund Growth | World Growth vs. Intermediate Term Bond Fund |
| World Core vs. Rbb Fund | World Core vs. Rbc Microcap Value | World Core vs. Iaadx | World Core vs. Abr 7525 Volatility |
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 Stocks Directory module to find actively traded stocks across global markets.
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