Correlation Between Scharf Global and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Midcap Growth 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 Scharf Global and Midcap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Midcap Growth Fund, you can compare the effects of market volatilities on Scharf Global and Midcap Growth 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 Scharf Global with a short position of Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Midcap Growth.
Diversification Opportunities for Scharf Global and Midcap Growth
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scharf and Midcap is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Scharf Global i.e., Scharf Global and Midcap Growth go up and down completely randomly.
Pair Corralation between Scharf Global and Midcap Growth
Assuming the 90 days horizon Scharf Global is expected to generate 2.84 times less return on investment than Midcap Growth. But when comparing it to its historical volatility, Scharf Global Opportunity is 1.87 times less risky than Midcap Growth. It trades about 0.19 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 925.00 in Midcap Growth Fund on May 1, 2025 and sell it today you would earn a total of 186.00 from holding Midcap Growth Fund or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Midcap Growth Fund
Performance |
| Timeline |
| Scharf Global Opportunity |
| Midcap Growth |
Scharf Global and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Midcap Growth
The main advantage of trading using opposite Scharf Global and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Scharf Global vs. Ab Bond Inflation | Scharf Global vs. Pimco Inflation Response | Scharf Global vs. Tiaa Cref Inflation Link | Scharf Global vs. Ab Bond Inflation |
| Midcap Growth vs. John Hancock Money | Midcap Growth vs. Dws Government Money | Midcap Growth vs. Cref Money Market | Midcap Growth vs. Voya Government Money |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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