Correlation Between Global Absolute and Fs Multi
Can any of the company-specific risk be diversified away by investing in both Global Absolute and Fs Multi 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 Global Absolute and Fs Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Absolute Return and Fs Multi Strategy Alt, you can compare the effects of market volatilities on Global Absolute and Fs Multi 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 Global Absolute with a short position of Fs Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Absolute and Fs Multi.
Diversification Opportunities for Global Absolute and Fs Multi
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and FSMMX is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Global Absolute Return and Fs Multi Strategy Alt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Multi Strategy and Global Absolute 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 Global Absolute Return are associated (or correlated) with Fs Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Multi Strategy has no effect on the direction of Global Absolute i.e., Global Absolute and Fs Multi go up and down completely randomly.
Pair Corralation between Global Absolute and Fs Multi
Assuming the 90 days horizon Global Absolute Return is expected to under-perform the Fs Multi. In addition to that, Global Absolute is 2.78 times more volatile than Fs Multi Strategy Alt. It trades about -0.06 of its total potential returns per unit of risk. Fs Multi Strategy Alt is currently generating about 0.28 per unit of volatility. If you would invest 1,094 in Fs Multi Strategy Alt on February 18, 2024 and sell it today you would earn a total of 23.00 from holding Fs Multi Strategy Alt or generate 2.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global Absolute Return vs. Fs Multi Strategy Alt
Performance |
Timeline |
Global Absolute Return |
Fs Multi Strategy |
Global Absolute and Fs Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Absolute and Fs Multi
The main advantage of trading using opposite Global Absolute and Fs Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Absolute position performs unexpectedly, Fs Multi 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 Fs Multi will offset losses from the drop in Fs Multi's long position.Global Absolute vs. Regional Bank Fund | Global Absolute vs. Regional Bank Fund | Global Absolute vs. Multimanager Lifestyle Moderate | Global Absolute vs. Multimanager Lifestyle Balanced |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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