Correlation Between European Equity and Fiera Capital
Can any of the company-specific risk be diversified away by investing in both European Equity and Fiera Capital 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 European Equity and Fiera Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Equity Closed and Fiera Capital, you can compare the effects of market volatilities on European Equity and Fiera Capital 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 European Equity with a short position of Fiera Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Equity and Fiera Capital.
Diversification Opportunities for European Equity and Fiera Capital
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between European and Fiera is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding European Equity Closed and Fiera Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiera Capital and European Equity 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 European Equity Closed are associated (or correlated) with Fiera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiera Capital has no effect on the direction of European Equity i.e., European Equity and Fiera Capital go up and down completely randomly.
Pair Corralation between European Equity and Fiera Capital
Considering the 90-day investment horizon European Equity Closed is expected to under-perform the Fiera Capital. But the fund apears to be less risky and, when comparing its historical volatility, European Equity Closed is 2.96 times less risky than Fiera Capital. The fund trades about -0.37 of its potential returns per unit of risk. The Fiera Capital is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 689.00 in Fiera Capital on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Fiera Capital or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
European Equity Closed vs. Fiera Capital
Performance |
| Timeline |
| European Equity Closed |
| Fiera Capital |
European Equity and Fiera Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Equity and Fiera Capital
The main advantage of trading using opposite European Equity and Fiera Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Equity position performs unexpectedly, Fiera Capital 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 Fiera Capital will offset losses from the drop in Fiera Capital's long position.| European Equity vs. XAI Octagon Floating | European Equity vs. MFS Charter Income | European Equity vs. Nuveen New York | European Equity vs. Invesco High Income |
| Fiera Capital vs. AGF Management Limited | Fiera Capital vs. Azimut Holding SpA | Fiera Capital vs. Ameritrans Capital Corp | Fiera Capital vs. Elysee Development Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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