Correlation Between Lifestyle and Fs Multi-strategy
Can any of the company-specific risk be diversified away by investing in both Lifestyle and Fs Multi-strategy 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 Lifestyle and Fs Multi-strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Moderate and Fs Multi Strategy Alt, you can compare the effects of market volatilities on Lifestyle and Fs Multi-strategy 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 Lifestyle with a short position of Fs Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Fs Multi-strategy.
Diversification Opportunities for Lifestyle and Fs Multi-strategy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lifestyle and FSMMX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Moderate and Fs Multi Strategy Alt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Multi Strategy and Lifestyle 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 Lifestyle Ii Moderate are associated (or correlated) with Fs Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Multi Strategy has no effect on the direction of Lifestyle i.e., Lifestyle and Fs Multi-strategy go up and down completely randomly.
Pair Corralation between Lifestyle and Fs Multi-strategy
Assuming the 90 days horizon Lifestyle Ii Moderate is expected to generate 2.56 times more return on investment than Fs Multi-strategy. However, Lifestyle is 2.56 times more volatile than Fs Multi Strategy Alt. It trades about 0.08 of its potential returns per unit of risk. Fs Multi Strategy Alt is currently generating about 0.11 per unit of risk. If you would invest 943.00 in Lifestyle Ii Moderate on November 27, 2024 and sell it today you would earn a total of 161.00 from holding Lifestyle Ii Moderate or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifestyle Ii Moderate vs. Fs Multi Strategy Alt
Performance |
| Timeline |
| Lifestyle Ii Moderate |
| Fs Multi Strategy |
Lifestyle and Fs Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Fs Multi-strategy
The main advantage of trading using opposite Lifestyle and Fs Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle position performs unexpectedly, Fs Multi-strategy 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 Fs Multi-strategy will offset losses from the drop in Fs Multi-strategy's long position.| Lifestyle vs. Alpine Ultra Short | Lifestyle vs. Angel Oak Ultrashort | Lifestyle vs. Cmg Ultra Short | Lifestyle vs. T Rowe Price |
| Fs Multi-strategy vs. Fs Real Asset | Fs Multi-strategy vs. Fs Multi Strategy Alt | Fs Multi-strategy vs. Fs Real Asset | Fs Multi-strategy vs. Mndvux |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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