Correlation Between AltShares Trust and FAM
Can any of the company-specific risk be diversified away by investing in both AltShares Trust and FAM 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 AltShares Trust and FAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AltShares Trust and FAM, you can compare the effects of market volatilities on AltShares Trust and FAM 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 AltShares Trust with a short position of FAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of AltShares Trust and FAM.
Diversification Opportunities for AltShares Trust and FAM
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AltShares and FAM is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AltShares Trust and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM and AltShares Trust 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 AltShares Trust are associated (or correlated) with FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of AltShares Trust i.e., AltShares Trust and FAM go up and down completely randomly.
Pair Corralation between AltShares Trust and FAM
If you would invest 674.00 in FAM on September 1, 2024 and sell it today you would earn a total of 0.00 from holding FAM or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
AltShares Trust vs. FAM
Performance |
| Timeline |
| AltShares Trust |
| FAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
AltShares Trust and FAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AltShares Trust and FAM
The main advantage of trading using opposite AltShares Trust and FAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AltShares Trust position performs unexpectedly, FAM 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 FAM will offset losses from the drop in FAM's long position.| AltShares Trust vs. Albany International | AltShares Trust vs. Acadia Realty Trust | AltShares Trust vs. AptarGroup | AltShares Trust vs. Applied Industrial Technologies |
| FAM vs. Blackstone Gso Long | FAM vs. Blackstone Gso Senior | FAM vs. Nuveen Floating Rate | FAM vs. Pioneer Floating Rate |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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