Correlation Between Fpa Crescent and Large Cap
Can any of the company-specific risk be diversified away by investing in both Fpa Crescent and Large Cap 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 Fpa Crescent and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fpa Crescent Fund and Large Cap Fund, you can compare the effects of market volatilities on Fpa Crescent and Large Cap 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 Fpa Crescent with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fpa Crescent and Large Cap.
Diversification Opportunities for Fpa Crescent and Large Cap
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fpa and Large is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fpa Crescent Fund and Large Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Fund and Fpa Crescent 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 Fpa Crescent Fund are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Fund has no effect on the direction of Fpa Crescent i.e., Fpa Crescent and Large Cap go up and down completely randomly.
Pair Corralation between Fpa Crescent and Large Cap
Assuming the 90 days horizon Fpa Crescent Fund is expected to generate 0.49 times more return on investment than Large Cap. However, Fpa Crescent Fund is 2.05 times less risky than Large Cap. It trades about 0.09 of its potential returns per unit of risk. Large Cap Fund is currently generating about 0.02 per unit of risk. If you would invest 3,301 in Fpa Crescent Fund on August 28, 2024 and sell it today you would earn a total of 1,019 from holding Fpa Crescent Fund or generate 30.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fpa Crescent Fund vs. Large Cap Fund
Performance |
| Timeline |
| Fpa Crescent |
| Large Cap Fund |
Fpa Crescent and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fpa Crescent and Large Cap
The main advantage of trading using opposite Fpa Crescent and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fpa Crescent position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Fpa Crescent vs. Permanent Portfolio Class | Fpa Crescent vs. Amg Yacktman Fund | Fpa Crescent vs. Berwyn Income Fund | Fpa Crescent vs. First Eagle Global |
| Large Cap vs. Wasatch Large Cap | Large Cap vs. Loomis Sayles Bond | Large Cap vs. Harbor International Fund | Large Cap vs. Equity Series Class |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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