Correlation Between Fam Value and Nicholas Fund
Can any of the company-specific risk be diversified away by investing in both Fam Value and Nicholas Fund 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 Fam Value and Nicholas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fam Value Fund and Nicholas Fund Inc, you can compare the effects of market volatilities on Fam Value and Nicholas Fund 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 Fam Value with a short position of Nicholas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fam Value and Nicholas Fund.
Diversification Opportunities for Fam Value and Nicholas Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fam and Nicholas is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fam Value Fund and Nicholas Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Fund and Fam Value 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 Fam Value Fund are associated (or correlated) with Nicholas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Fund has no effect on the direction of Fam Value i.e., Fam Value and Nicholas Fund go up and down completely randomly.
Pair Corralation between Fam Value and Nicholas Fund
Assuming the 90 days horizon Fam Value is expected to generate 1.41 times less return on investment than Nicholas Fund. In addition to that, Fam Value is 1.02 times more volatile than Nicholas Fund Inc. It trades about 0.06 of its total potential returns per unit of risk. Nicholas Fund Inc is currently generating about 0.08 per unit of volatility. If you would invest 7,165 in Nicholas Fund Inc on August 26, 2024 and sell it today you would earn a total of 2,851 from holding Nicholas Fund Inc or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fam Value Fund vs. Nicholas Fund Inc
Performance |
| Timeline |
| Fam Value Fund |
| Nicholas Fund |
Fam Value and Nicholas Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fam Value and Nicholas Fund
The main advantage of trading using opposite Fam Value and Nicholas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fam Value position performs unexpectedly, Nicholas Fund 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 Nicholas Fund will offset losses from the drop in Nicholas Fund's long position.| Fam Value vs. Fam Equity Income Fund | Fam Value vs. Meridian Growth Fund | Fam Value vs. Muhlenkamp Fund Institutional | Fam Value vs. Royce Pennsylvania Mutual |
| Nicholas Fund vs. Nicholas Equity Income | Nicholas Fund vs. Nicholas Ltd Edition | Nicholas Fund vs. Nicholas Ii Inc | Nicholas Fund vs. Nicholas Ltd Edition |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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