Correlation Between Absolute Convertible and Fs Managed
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Fs Managed 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 Absolute Convertible and Fs Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Fs Managed Futures, you can compare the effects of market volatilities on Absolute Convertible and Fs Managed 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 Absolute Convertible with a short position of Fs Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Fs Managed.
Diversification Opportunities for Absolute Convertible and Fs Managed
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Absolute and FMFFX is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Fs Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Managed Futures and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Fs Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Managed Futures has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Fs Managed go up and down completely randomly.
Pair Corralation between Absolute Convertible and Fs Managed
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.15 times more return on investment than Fs Managed. However, Absolute Convertible Arbitrage is 6.84 times less risky than Fs Managed. It trades about 0.19 of its potential returns per unit of risk. Fs Managed Futures is currently generating about -0.01 per unit of risk. If you would invest 1,038 in Absolute Convertible Arbitrage on August 26, 2024 and sell it today you would earn a total of 110.00 from holding Absolute Convertible Arbitrage or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.97% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Fs Managed Futures
Performance |
| Timeline |
| Absolute Convertible |
| Fs Managed Futures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Absolute Convertible and Fs Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Fs Managed
The main advantage of trading using opposite Absolute Convertible and Fs Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Fs Managed 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 Managed will offset losses from the drop in Fs Managed's long position.| Absolute Convertible vs. Absolute Capital Opportunities | Absolute Convertible vs. Invesco Small Cap | Absolute Convertible vs. Vanguard 500 Index | Absolute Convertible vs. Rivernorth Opportunities |
| Fs Managed vs. Absolute Convertible Arbitrage | Fs Managed vs. Mainstay Vertible Fund | Fs Managed vs. Harbor Vertible Securities | Fs Managed vs. Miller Vertible Bond |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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