Correlation Between Fs Multi-strategy and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Fs Multi-strategy and Calvert Emerging 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 Fs Multi-strategy and Calvert Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fs Multi Strategy Alt and Calvert Emerging Markets, you can compare the effects of market volatilities on Fs Multi-strategy and Calvert Emerging 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 Fs Multi-strategy with a short position of Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fs Multi-strategy and Calvert Emerging.
Diversification Opportunities for Fs Multi-strategy and Calvert Emerging
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSMMX and Calvert is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fs Multi Strategy Alt and Calvert Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Emerging Markets and Fs Multi-strategy 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 Fs Multi Strategy Alt are associated (or correlated) with Calvert Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Emerging Markets has no effect on the direction of Fs Multi-strategy i.e., Fs Multi-strategy and Calvert Emerging go up and down completely randomly.
Pair Corralation between Fs Multi-strategy and Calvert Emerging
Assuming the 90 days horizon Fs Multi Strategy Alt is expected to generate 0.21 times more return on investment than Calvert Emerging. However, Fs Multi Strategy Alt is 4.82 times less risky than Calvert Emerging. It trades about 0.31 of its potential returns per unit of risk. Calvert Emerging Markets is currently generating about -0.25 per unit of risk. If you would invest 1,112 in Fs Multi Strategy Alt on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Fs Multi Strategy Alt or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fs Multi Strategy Alt vs. Calvert Emerging Markets
Performance |
| Timeline |
| Fs Multi Strategy |
| Calvert Emerging Markets |
Fs Multi-strategy and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fs Multi-strategy and Calvert Emerging
The main advantage of trading using opposite Fs Multi-strategy and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fs Multi-strategy position performs unexpectedly, Calvert Emerging 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 Calvert Emerging will offset losses from the drop in Calvert Emerging's long position.| Fs Multi-strategy vs. Franklin Moderate Allocation | Fs Multi-strategy vs. Lifestyle Ii Moderate | Fs Multi-strategy vs. Pro Blend Moderate Term | Fs Multi-strategy vs. American Funds Retirement |
| Calvert Emerging vs. Fidelity Capital Income | Calvert Emerging vs. Msift High Yield | Calvert Emerging vs. Victory High Yield | Calvert Emerging vs. Calvert High Yield |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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