Correlation Between Small Cap and Fisher Small
Can any of the company-specific risk be diversified away by investing in both Small Cap and Fisher 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 Small Cap and Fisher Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Growth and Fisher Small Cap, you can compare the effects of market volatilities on Small Cap and Fisher 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 Small Cap with a short position of Fisher Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Fisher Small.
Diversification Opportunities for Small Cap and Fisher Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Fisher is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Growth and Fisher Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Small Cap and Small Cap 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 Small Cap Growth are associated (or correlated) with Fisher Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Small Cap has no effect on the direction of Small Cap i.e., Small Cap and Fisher Small go up and down completely randomly.
Pair Corralation between Small Cap and Fisher Small
Assuming the 90 days horizon Small Cap is expected to generate 1.14 times less return on investment than Fisher Small. But when comparing it to its historical volatility, Small Cap Growth is 1.28 times less risky than Fisher Small. It trades about 0.35 of its potential returns per unit of risk. Fisher Small Cap is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Fisher Small Cap on September 1, 2024 and sell it today you would earn a total of 142.00 from holding Fisher Small Cap or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Growth vs. Fisher Small Cap
Performance |
| Timeline |
| Small Cap Growth |
| Fisher Small Cap |
Small Cap and Fisher Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Fisher Small
The main advantage of trading using opposite Small Cap and Fisher Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Fisher 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 Fisher Small will offset losses from the drop in Fisher Small's long position.| Small Cap vs. Bbh Trust | Small Cap vs. Transamerica Funds | Small Cap vs. Ashmore Emerging Markets | Small Cap vs. T Rowe Price |
| Fisher Small vs. Fisher Large Cap | Fisher Small vs. Fisher All Foreign | Fisher Small vs. Tactical Multi Purpose Fund | Fisher Small vs. Fisher Stock |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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