Correlation Between Fs Multi-strategy and Dean Small
Can any of the company-specific risk be diversified away by investing in both Fs Multi-strategy and Dean Small 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 Fs Multi-strategy and Dean Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fs Multi Strategy Alt and Dean Small Cap, you can compare the effects of market volatilities on Fs Multi-strategy and Dean Small 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 Fs Multi-strategy with a short position of Dean Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fs Multi-strategy and Dean Small.
Diversification Opportunities for Fs Multi-strategy and Dean Small
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSMMX and Dean is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fs Multi Strategy Alt and Dean Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dean Small Cap and Fs Multi-strategy 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 Fs Multi Strategy Alt are associated (or correlated) with Dean Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dean Small Cap has no effect on the direction of Fs Multi-strategy i.e., Fs Multi-strategy and Dean Small go up and down completely randomly.
Pair Corralation between Fs Multi-strategy and Dean Small
Assuming the 90 days horizon Fs Multi Strategy Alt is expected to generate 0.18 times more return on investment than Dean Small. However, Fs Multi Strategy Alt is 5.54 times less risky than Dean Small. It trades about 0.24 of its potential returns per unit of risk. Dean Small Cap is currently generating about 0.03 per unit of risk. If you would invest 1,109 in Fs Multi Strategy Alt on February 5, 2024 and sell it today you would earn a total of 9.00 from holding Fs Multi Strategy Alt or generate 0.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fs Multi Strategy Alt vs. Dean Small Cap
Performance |
Timeline |
Fs Multi Strategy |
Dean Small Cap |
Fs Multi-strategy and Dean Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fs Multi-strategy and Dean Small
The main advantage of trading using opposite Fs Multi-strategy and Dean Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fs Multi-strategy position performs unexpectedly, Dean Small 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 Dean Small will offset losses from the drop in Dean Small's long position.The idea behind Fs Multi Strategy Alt and Dean Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Dean Small vs. Vanguard Small Cap Value | Dean Small vs. Vanguard Small Cap Value | Dean Small vs. Us Targeted Value | Dean Small vs. Undiscovered Managers Behavioral |
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 CEOs Directory module to screen CEOs from public companies around the world.
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