Correlation Between Fisher Small and Matson Money
Can any of the company-specific risk be diversified away by investing in both Fisher Small and Matson Money 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 Matson Money 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 Matson Money Equity, you can compare the effects of market volatilities on Fisher Small and Matson Money 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 Matson Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Small and Matson Money.
Diversification Opportunities for Fisher Small and Matson Money
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fisher and Matson is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Matson Money Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Money Equity 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 Matson Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Money Equity has no effect on the direction of Fisher Small i.e., Fisher Small and Matson Money go up and down completely randomly.
Pair Corralation between Fisher Small and Matson Money
Assuming the 90 days horizon Fisher Small Cap is expected to generate 1.3 times more return on investment than Matson Money. However, Fisher Small is 1.3 times more volatile than Matson Money Equity. It trades about 0.16 of its potential returns per unit of risk. Matson Money Equity is currently generating about 0.16 per unit of risk. If you would invest 1,192 in Fisher Small Cap on September 2, 2024 and sell it today you would earn a total of 161.00 from holding Fisher Small Cap or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Small Cap vs. Matson Money Equity
Performance |
| Timeline |
| Fisher Small Cap |
| Matson Money Equity |
Fisher Small and Matson Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Small and Matson Money
The main advantage of trading using opposite Fisher Small and Matson Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Small position performs unexpectedly, Matson Money 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 Matson Money will offset losses from the drop in Matson Money's long position.| Fisher Small vs. Fisher Large Cap | Fisher Small vs. Fisher All Foreign | Fisher Small vs. Tactical Multi Purpose Fund | Fisher Small vs. Fisher Stock |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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