Correlation Between Ftufox and High Income
Can any of the company-specific risk be diversified away by investing in both Ftufox and High Income 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 Ftufox and High Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ftufox and High Income Fund, you can compare the effects of market volatilities on Ftufox and High Income 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 Ftufox with a short position of High Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftufox and High Income.
Diversification Opportunities for Ftufox and High Income
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ftufox and High is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ftufox and High Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Income Fund and Ftufox 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 Ftufox are associated (or correlated) with High Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Income Fund has no effect on the direction of Ftufox i.e., Ftufox and High Income go up and down completely randomly.
Pair Corralation between Ftufox and High Income
Assuming the 90 days trading horizon Ftufox is expected to generate 6.39 times less return on investment than High Income. But when comparing it to its historical volatility, Ftufox is 1.58 times less risky than High Income. It trades about 0.03 of its potential returns per unit of risk. High Income Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 591.00 in High Income Fund on October 25, 2024 and sell it today you would earn a total of 98.00 from holding High Income Fund or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 3.64% |
| Values | Daily Returns |
Ftufox vs. High Income Fund
Performance |
| Timeline |
| Ftufox |
| High Income Fund |
Ftufox and High Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftufox and High Income
The main advantage of trading using opposite Ftufox and High Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftufox position performs unexpectedly, High Income 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 High Income will offset losses from the drop in High Income's long position.| Ftufox vs. Americafirst Monthly Risk On | Ftufox vs. Prudential High Yield | Ftufox vs. Ab High Income | Ftufox vs. Pace High Yield |
| High Income vs. Transamerica High Yield | High Income vs. Needham Aggressive Growth | High Income vs. Msift High Yield | High Income vs. Ab High Income |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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