Cash Position Weight

The Cash Position Weight Fundamental Analysis lookup allows you to check this and other indicators for any equity instrument. You can also select from a set of available indicators by clicking on the link to the right. Please note, this module does not cover all equities due to inconsistencies in global equity categorizations. Please continue to Equity Screeners to view more equity screening tools.
  
Funds or ETFs that have over 40% of their value invested in low-risk instruments or cash equivalents typically attract conservative investors.

Cash Percentage

 = 

% of Cash

in the fund

Percentage of fund asset invested in cash equivalents or risk-free instruments. About 40% of all global funds carry cash on their balance sheet.

Cash Position Weight In A Nutshell

When looking into funds or your own portfolio, cash is important because it will allow you to purchase more assets when the prices fall, but it will keep you safe from an overall market downturn. Many people look at cash and think that’s not a position, but it certainly is and can be used to your advantage in your investing style.

Typically in funds or within your own portfolio, there are three main categories, which include equities, bonds, or cash. Many people fail to realize cash is a position and it is important it is utilized properly. When the market is roaring, you may want to see minimal cash because funds should be invested.

Closer Look at Cash Position Weight

When looking into a mutual fund, you may want to see little cash because the fund is supposed to be going towards a goal for the annual return. The diversification within the fund should be enough to eliminate specific risks, meaning most of the cash should be put to work. On the other hand, if you are in a bond fund, it may be more acceptable to have a little more cash on hand as holding cash is essentially risk free.

Negatives to having cash in a fund or your portfolio is that the money is not growing. There are options such as money market accounts, but that will earn minimal interest and is not an investment for the long term, but rather capital preservation. Also, you have to look at the inflation rate, because if your money is not earning over 2%, you run the risk of losing money due to inflation. There are many factors involved with cash and each situation has its pros and cons, so be sure to understand what each scenario is telling you.

Rounding the discussion, you typically want to see most, if not all the funds available being invested because the missed opportunities are greater. If another 2008 happens, then it is completely understandable that cash positions are larger because it will limit the negative affects.  If you have questions, reach out to the companies that produce your products you might invest in and ask why they have cash allocations as they do. Be sure to have a full understanding before moving into new positions, and if you still feel nervous, just forgo that particular product and check another one out. Cash position weighting is just as important as any other factor in your portfolio or the funds you are investing in.

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Pair Trading with Investor Education

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Investor Education position performs unexpectedly, the other equity 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 Investor Education will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to First Horizon could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace First Horizon when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back First Horizon - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling First Horizon National to buy it.
The correlation of First Horizon is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as First Horizon moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if First Horizon National moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for First Horizon can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Check out Investing Opportunities to better understand how to build diversified portfolios. Also, note that the market value of any private could be closely tied with the direction of predictive economic indicators such as signals in estimate.
You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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