Correlation Between Fs Multi-strategy and Longleaf Partners
Can any of the company-specific risk be diversified away by investing in both Fs Multi-strategy and Longleaf Partners 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 Longleaf Partners 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 Longleaf Partners International, you can compare the effects of market volatilities on Fs Multi-strategy and Longleaf Partners 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 Longleaf Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fs Multi-strategy and Longleaf Partners.
Diversification Opportunities for Fs Multi-strategy and Longleaf Partners
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FSMMX and Longleaf is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fs Multi Strategy Alt and Longleaf Partners Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longleaf Partners 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 Longleaf Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longleaf Partners has no effect on the direction of Fs Multi-strategy i.e., Fs Multi-strategy and Longleaf Partners go up and down completely randomly.
Pair Corralation between Fs Multi-strategy and Longleaf Partners
Assuming the 90 days horizon Fs Multi-strategy is expected to generate 1.46 times less return on investment than Longleaf Partners. But when comparing it to its historical volatility, Fs Multi Strategy Alt is 5.63 times less risky than Longleaf Partners. It trades about 0.11 of its potential returns per unit of risk. Longleaf Partners International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,465 in Longleaf Partners International on August 31, 2024 and sell it today you would earn a total of 152.00 from holding Longleaf Partners International or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fs Multi Strategy Alt vs. Longleaf Partners Internationa
Performance |
| Timeline |
| Fs Multi Strategy |
| Longleaf Partners |
Fs Multi-strategy and Longleaf Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fs Multi-strategy and Longleaf Partners
The main advantage of trading using opposite Fs Multi-strategy and Longleaf Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fs Multi-strategy position performs unexpectedly, Longleaf Partners 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 Longleaf Partners will offset losses from the drop in Longleaf Partners' long position.| Fs Multi-strategy vs. Mfs International Diversification | Fs Multi-strategy vs. HUMANA INC | Fs Multi-strategy vs. Aquagold International | Fs Multi-strategy vs. Barloworld Ltd ADR |
| Longleaf Partners vs. T Rowe Price | Longleaf Partners vs. Metropolitan West High | Longleaf Partners vs. California High Yield Municipal | Longleaf Partners vs. Lgm Risk Managed |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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