Correlation Between Fwnhtx and Global Growth
Can any of the company-specific risk be diversified away by investing in both Fwnhtx and Global Growth 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 Fwnhtx and Global Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fwnhtx and Global Growth Fund, you can compare the effects of market volatilities on Fwnhtx and Global Growth 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 Fwnhtx with a short position of Global Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fwnhtx and Global Growth.
Diversification Opportunities for Fwnhtx and Global Growth
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fwnhtx and Global is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fwnhtx and Global Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Growth and Fwnhtx 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 Fwnhtx are associated (or correlated) with Global Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Growth has no effect on the direction of Fwnhtx i.e., Fwnhtx and Global Growth go up and down completely randomly.
Pair Corralation between Fwnhtx and Global Growth
Assuming the 90 days trading horizon Fwnhtx is expected to generate 33.89 times less return on investment than Global Growth. But when comparing it to its historical volatility, Fwnhtx is 31.14 times less risky than Global Growth. It trades about 0.16 of its potential returns per unit of risk. Global Growth Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Global Growth Fund on November 3, 2024 and sell it today you would earn a total of 44.00 from holding Global Growth Fund or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Fwnhtx vs. Global Growth Fund
Performance |
| Timeline |
| Fwnhtx |
| Global Growth |
Fwnhtx and Global Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fwnhtx and Global Growth
The main advantage of trading using opposite Fwnhtx and Global Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fwnhtx position performs unexpectedly, Global Growth 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 Global Growth will offset losses from the drop in Global Growth's long position.| Fwnhtx vs. Ms Global Fixed | Fwnhtx vs. Mirova Global Green | Fwnhtx vs. Blrc Sgy Mnp | Fwnhtx vs. Baird Quality Intermediate |
| Global Growth vs. Mid Cap Value | Global Growth vs. Equity Growth Fund | Global Growth vs. Income Growth Fund | Global Growth vs. Emerging Markets Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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