Correlation Between Growth Fund and Fm Investments

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Fm Investments 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 Growth Fund and Fm Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Fm Investments Large, you can compare the effects of market volatilities on Growth Fund and Fm Investments 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 Growth Fund with a short position of Fm Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Fm Investments.

Diversification Opportunities for Growth Fund and Fm Investments

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Growth and IAFLX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Fm Investments Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fm Investments Large and Growth Fund 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 Growth Fund Of are associated (or correlated) with Fm Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fm Investments Large has no effect on the direction of Growth Fund i.e., Growth Fund and Fm Investments go up and down completely randomly.

Pair Corralation between Growth Fund and Fm Investments

Assuming the 90 days horizon Growth Fund is expected to generate 2.16 times less return on investment than Fm Investments. But when comparing it to its historical volatility, Growth Fund Of is 1.2 times less risky than Fm Investments. It trades about 0.11 of its potential returns per unit of risk. Fm Investments Large is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,879  in Fm Investments Large on September 13, 2024 and sell it today you would earn a total of  63.00  from holding Fm Investments Large or generate 3.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Growth Fund Of  vs.  Fm Investments Large

 Performance 
       Timeline  
Growth Fund 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Of are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Fm Investments Large 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fm Investments Large are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fm Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Growth Fund and Fm Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Growth Fund and Fm Investments

The main advantage of trading using opposite Growth Fund and Fm Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Fm Investments 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 Fm Investments will offset losses from the drop in Fm Investments' long position.
The idea behind Growth Fund Of and Fm Investments Large pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Commodity Directory
Find actively traded commodities issued by global exchanges
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum