Correlation Between F/m Investments and Cognios Market
Can any of the company-specific risk be diversified away by investing in both F/m Investments and Cognios Market 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 F/m Investments and Cognios Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fm Investments Large and Cognios Market Neutral, you can compare the effects of market volatilities on F/m Investments and Cognios Market 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 F/m Investments with a short position of Cognios Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of F/m Investments and Cognios Market.
Diversification Opportunities for F/m Investments and Cognios Market
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between F/m and Cognios is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large and Cognios Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognios Market Neutral and F/m Investments 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 Fm Investments Large are associated (or correlated) with Cognios Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognios Market Neutral has no effect on the direction of F/m Investments i.e., F/m Investments and Cognios Market go up and down completely randomly.
Pair Corralation between F/m Investments and Cognios Market
Assuming the 90 days horizon Fm Investments Large is expected to under-perform the Cognios Market. In addition to that, F/m Investments is 5.1 times more volatile than Cognios Market Neutral. It trades about -0.21 of its total potential returns per unit of risk. Cognios Market Neutral is currently generating about -0.05 per unit of volatility. If you would invest 1,242 in Cognios Market Neutral on December 1, 2024 and sell it today you would lose (3.00) from holding Cognios Market Neutral or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fm Investments Large vs. Cognios Market Neutral
Performance |
| Timeline |
| Fm Investments Large |
| Cognios Market Neutral |
F/m Investments and Cognios Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with F/m Investments and Cognios Market
The main advantage of trading using opposite F/m Investments and Cognios Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F/m Investments position performs unexpectedly, Cognios Market 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 Cognios Market will offset losses from the drop in Cognios Market's long position.| F/m Investments vs. T Rowe Price | F/m Investments vs. Barings Active Short | F/m Investments vs. Rbc Emerging Markets | F/m Investments vs. Tfa Alphagen Growth |
| Cognios Market vs. Mainstay High Yield | Cognios Market vs. Buffalo High Yield | Cognios Market vs. Pace High Yield | Cognios Market vs. Artisan 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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