Correlation Between Fabwx and Oshaughnessy Market
Can any of the company-specific risk be diversified away by investing in both Fabwx and Oshaughnessy Market 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 Fabwx and Oshaughnessy Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fabwx and Oshaughnessy Market Leaders, you can compare the effects of market volatilities on Fabwx and Oshaughnessy Market 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 Fabwx with a short position of Oshaughnessy Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fabwx and Oshaughnessy Market.
Diversification Opportunities for Fabwx and Oshaughnessy Market
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fabwx and Oshaughnessy is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fabwx and Oshaughnessy Market Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshaughnessy Market and Fabwx 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 Fabwx are associated (or correlated) with Oshaughnessy Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshaughnessy Market has no effect on the direction of Fabwx i.e., Fabwx and Oshaughnessy Market go up and down completely randomly.
Pair Corralation between Fabwx and Oshaughnessy Market
Assuming the 90 days horizon Fabwx is expected to generate 8.4 times less return on investment than Oshaughnessy Market. In addition to that, Fabwx is 1.68 times more volatile than Oshaughnessy Market Leaders. It trades about 0.02 of its total potential returns per unit of risk. Oshaughnessy Market Leaders is currently generating about 0.22 per unit of volatility. If you would invest 1,959 in Oshaughnessy Market Leaders on November 7, 2024 and sell it today you would earn a total of 75.00 from holding Oshaughnessy Market Leaders or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fabwx vs. Oshaughnessy Market Leaders
Performance |
| Timeline |
| Fabwx |
| Oshaughnessy Market |
Fabwx and Oshaughnessy Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fabwx and Oshaughnessy Market
The main advantage of trading using opposite Fabwx and Oshaughnessy Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fabwx position performs unexpectedly, Oshaughnessy Market 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 Oshaughnessy Market will offset losses from the drop in Oshaughnessy Market's long position.| Fabwx vs. Barings Active Short | Fabwx vs. American Funds Tax Exempt | Fabwx vs. Blackrock Short Obligations | Fabwx vs. Blackrock Global Longshort |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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