Correlation Between Fisher Small and Eventide Large
Can any of the company-specific risk be diversified away by investing in both Fisher Small and Eventide Large 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 Fisher Small and Eventide Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Small Cap and Eventide Large Cap, you can compare the effects of market volatilities on Fisher Small and Eventide Large 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 Fisher Small with a short position of Eventide Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Small and Eventide Large.
Diversification Opportunities for Fisher Small and Eventide Large
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fisher and Eventide is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap and Fisher Small 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 Fisher Small Cap are associated (or correlated) with Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of Fisher Small i.e., Fisher Small and Eventide Large go up and down completely randomly.
Pair Corralation between Fisher Small and Eventide Large
Assuming the 90 days horizon Fisher Small Cap is expected to generate 1.33 times more return on investment than Eventide Large. However, Fisher Small is 1.33 times more volatile than Eventide Large Cap. It trades about -0.04 of its potential returns per unit of risk. Eventide Large Cap is currently generating about -0.1 per unit of risk. If you would invest 1,327 in Fisher Small Cap on September 13, 2024 and sell it today you would lose (11.00) from holding Fisher Small Cap or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Small Cap vs. Eventide Large Cap
Performance |
| Timeline |
| Fisher Small Cap |
| Eventide Large Cap |
Fisher Small and Eventide Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Small and Eventide Large
The main advantage of trading using opposite Fisher Small and Eventide Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Small position performs unexpectedly, Eventide Large 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 Eventide Large will offset losses from the drop in Eventide Large's long position.| Fisher Small vs. Putnam Convertible Incm Gwth | Fisher Small vs. Lord Abbett Convertible | Fisher Small vs. Absolute Convertible Arbitrage | Fisher Small vs. Fidelity Sai Convertible |
| Eventide Large vs. Locorr Dynamic Equity | Eventide Large vs. Calamos Global Equity | Eventide Large vs. Scharf Fund Retail | Eventide Large vs. Gmo Global Equity |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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