Correlation Between Fuhkbx and New Perspective
Can any of the company-specific risk be diversified away by investing in both Fuhkbx and New Perspective 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 Fuhkbx and New Perspective into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuhkbx and New Perspective Fund, you can compare the effects of market volatilities on Fuhkbx and New Perspective 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 Fuhkbx with a short position of New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuhkbx and New Perspective.
Diversification Opportunities for Fuhkbx and New Perspective
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fuhkbx and New is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fuhkbx and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective and Fuhkbx 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 Fuhkbx are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Fuhkbx i.e., Fuhkbx and New Perspective go up and down completely randomly.
Pair Corralation between Fuhkbx and New Perspective
Assuming the 90 days trading horizon Fuhkbx is expected to generate 0.76 times more return on investment than New Perspective. However, Fuhkbx is 1.31 times less risky than New Perspective. It trades about 0.18 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.07 per unit of risk. If you would invest 967.00 in Fuhkbx on November 9, 2024 and sell it today you would earn a total of 32.00 from holding Fuhkbx or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.68% |
| Values | Daily Returns |
Fuhkbx vs. New Perspective Fund
Performance |
| Timeline |
| Fuhkbx |
| New Perspective |
Fuhkbx and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuhkbx and New Perspective
The main advantage of trading using opposite Fuhkbx and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuhkbx position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Fuhkbx vs. Dws Equity Sector | Fuhkbx vs. T Rowe Price | Fuhkbx vs. Dreyfusstandish Global Fixed | Fuhkbx vs. Nuveen Core Equity |
| New Perspective vs. Ultra Short Fixed Income | New Perspective vs. Fidelity Flex Servative | New Perspective vs. Cmg Ultra Short | New Perspective vs. Barings Active Short |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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