Correlation Between Fisher Small and Global Hard
Can any of the company-specific risk be diversified away by investing in both Fisher Small and Global Hard 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 Global Hard 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 Global Hard Assets, you can compare the effects of market volatilities on Fisher Small and Global Hard 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 Global Hard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Small and Global Hard.
Diversification Opportunities for Fisher Small and Global Hard
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fisher and Global is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Global Hard Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hard Assets 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 Global Hard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hard Assets has no effect on the direction of Fisher Small i.e., Fisher Small and Global Hard go up and down completely randomly.
Pair Corralation between Fisher Small and Global Hard
Assuming the 90 days horizon Fisher Small Cap is expected to generate 1.17 times more return on investment than Global Hard. However, Fisher Small is 1.17 times more volatile than Global Hard Assets. It trades about 0.04 of its potential returns per unit of risk. Global Hard Assets is currently generating about 0.0 per unit of risk. If you would invest 1,119 in Fisher Small Cap on September 1, 2024 and sell it today you would earn a total of 230.00 from holding Fisher Small Cap or generate 20.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Fisher Small Cap vs. Global Hard Assets
Performance |
| Timeline |
| Fisher Small Cap |
| Global Hard Assets |
Fisher Small and Global Hard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Small and Global Hard
The main advantage of trading using opposite Fisher Small and Global Hard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Small position performs unexpectedly, Global Hard 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 Hard will offset losses from the drop in Global Hard'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 |
| Global Hard vs. Unconstrained Emerging Markets | Global Hard vs. Unconstrained Emerging Markets | Global Hard vs. Unconstrained Emerging Markets | Global Hard 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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