Correlation Between Forum Real and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Forum Real and Global Fixed 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 Forum Real and Global Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Real Estate and Global Fixed Income, you can compare the effects of market volatilities on Forum Real and Global Fixed 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 Forum Real with a short position of Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Real and Global Fixed.
Diversification Opportunities for Forum Real and Global Fixed
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forum and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Forum Real Estate and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income and Forum Real 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 Forum Real Estate are associated (or correlated) with Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Forum Real i.e., Forum Real and Global Fixed go up and down completely randomly.
Pair Corralation between Forum Real and Global Fixed
Assuming the 90 days horizon Forum Real Estate is expected to generate 0.3 times more return on investment than Global Fixed. However, Forum Real Estate is 3.36 times less risky than Global Fixed. It trades about 0.52 of its potential returns per unit of risk. Global Fixed Income is currently generating about 0.14 per unit of risk. If you would invest 961.00 in Forum Real Estate on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Forum Real Estate or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Real Estate vs. Global Fixed Income
Performance |
| Timeline |
| Forum Real Estate |
| Global Fixed Income |
Forum Real and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Real and Global Fixed
The main advantage of trading using opposite Forum Real and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Real position performs unexpectedly, Global Fixed 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 Global Fixed will offset losses from the drop in Global Fixed's long position.| Forum Real vs. Western Assets Emerging | Forum Real vs. Catalystmillburn Hedge Strategy | Forum Real vs. Inverse Nasdaq 100 Strategy | Forum Real vs. Nasdaq 100 2x Strategy |
| Global Fixed vs. Saat Market Growth | Global Fixed vs. Inverse Emerging Markets | Global Fixed vs. Siit Emerging Markets | Global Fixed vs. Alphacentric Hedged Market |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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