Correlation Between Fs Multi-strategy and Chn Strs
Can any of the company-specific risk be diversified away by investing in both Fs Multi-strategy and Chn Strs 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 Chn Strs 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 Chn Strs Insti, you can compare the effects of market volatilities on Fs Multi-strategy and Chn Strs 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 Chn Strs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fs Multi-strategy and Chn Strs.
Diversification Opportunities for Fs Multi-strategy and Chn Strs
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSMMX and Chn is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fs Multi Strategy Alt and Chn Strs Insti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chn Strs Insti 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 Chn Strs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chn Strs Insti has no effect on the direction of Fs Multi-strategy i.e., Fs Multi-strategy and Chn Strs go up and down completely randomly.
Pair Corralation between Fs Multi-strategy and Chn Strs
Assuming the 90 days horizon Fs Multi-strategy is expected to generate 1.83 times less return on investment than Chn Strs. But when comparing it to its historical volatility, Fs Multi Strategy Alt is 3.38 times less risky than Chn Strs. It trades about 0.15 of its potential returns per unit of risk. Chn Strs Insti is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 896.00 in Chn Strs Insti on October 22, 2024 and sell it today you would earn a total of 10.00 from holding Chn Strs Insti or generate 1.12% 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. Chn Strs Insti
Performance |
| Timeline |
| Fs Multi Strategy |
| Chn Strs Insti |
Fs Multi-strategy and Chn Strs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fs Multi-strategy and Chn Strs
The main advantage of trading using opposite Fs Multi-strategy and Chn Strs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fs Multi-strategy position performs unexpectedly, Chn Strs 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 Chn Strs will offset losses from the drop in Chn Strs' long position.| Fs Multi-strategy vs. Nexpoint Real Estate | Fs Multi-strategy vs. Forum Real Estate | Fs Multi-strategy vs. Prudential Real Estate | Fs Multi-strategy vs. Third Avenue Real |
| Chn Strs vs. Ab Bond Inflation | Chn Strs vs. Guidepath Managed Futures | Chn Strs vs. Short Duration Inflation | Chn Strs vs. Guggenheim Managed Futures |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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