Correlation Between Fulcrum Diversified and Eafe Fund
Can any of the company-specific risk be diversified away by investing in both Fulcrum Diversified and Eafe 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 Fulcrum Diversified and Eafe Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulcrum Diversified Absolute and The Eafe Fund, you can compare the effects of market volatilities on Fulcrum Diversified and Eafe 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 Fulcrum Diversified with a short position of Eafe Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and Eafe Fund.
Diversification Opportunities for Fulcrum Diversified and Eafe Fund
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fulcrum and Eafe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and The Eafe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Fund and Fulcrum Diversified 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 Fulcrum Diversified Absolute are associated (or correlated) with Eafe Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Fund has no effect on the direction of Fulcrum Diversified i.e., Fulcrum Diversified and Eafe Fund go up and down completely randomly.
Pair Corralation between Fulcrum Diversified and Eafe Fund
Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to generate 0.16 times more return on investment than Eafe Fund. However, Fulcrum Diversified Absolute is 6.37 times less risky than Eafe Fund. It trades about 0.22 of its potential returns per unit of risk. The Eafe Fund is currently generating about -0.12 per unit of risk. If you would invest 933.00 in Fulcrum Diversified Absolute on October 21, 2024 and sell it today you would earn a total of 12.00 from holding Fulcrum Diversified Absolute or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulcrum Diversified Absolute vs. The Eafe Fund
Performance |
| Timeline |
| Fulcrum Diversified |
| Eafe Fund |
Fulcrum Diversified and Eafe Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulcrum Diversified and Eafe Fund
The main advantage of trading using opposite Fulcrum Diversified and Eafe Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Diversified position performs unexpectedly, Eafe 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 Eafe Fund will offset losses from the drop in Eafe Fund's long position.| Fulcrum Diversified vs. Ab Bond Inflation | Fulcrum Diversified vs. Great West Inflation Protected Securities | Fulcrum Diversified vs. Asg Managed Futures | Fulcrum Diversified vs. Lord Abbett Inflation |
| Eafe Fund vs. Moderate Balanced Allocation | Eafe Fund vs. Putnam Retirement Advantage | Eafe Fund vs. Tiaa Cref Lifestyle Moderate | Eafe Fund vs. Tiaa Cref Lifestyle Moderate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |