Correlation Between Floating Rate and Furyax
Can any of the company-specific risk be diversified away by investing in both Floating Rate and Furyax 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 Floating Rate and Furyax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Furyax, you can compare the effects of market volatilities on Floating Rate and Furyax 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 Floating Rate with a short position of Furyax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Furyax.
Diversification Opportunities for Floating Rate and Furyax
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Floating and Furyax is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund and Furyax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Furyax and Floating Rate 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 Floating Rate Fund are associated (or correlated) with Furyax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Furyax has no effect on the direction of Floating Rate i.e., Floating Rate and Furyax go up and down completely randomly.
Pair Corralation between Floating Rate and Furyax
Assuming the 90 days horizon Floating Rate is expected to generate 8.33 times less return on investment than Furyax. But when comparing it to its historical volatility, Floating Rate Fund is 4.33 times less risky than Furyax. It trades about 0.28 of its potential returns per unit of risk. Furyax is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 987.00 in Furyax on October 25, 2024 and sell it today you would earn a total of 48.00 from holding Furyax or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
Floating Rate Fund vs. Furyax
Performance |
| Timeline |
| Floating Rate |
| Furyax |
Floating Rate and Furyax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Furyax
The main advantage of trading using opposite Floating Rate and Furyax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate position performs unexpectedly, Furyax 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 Furyax will offset losses from the drop in Furyax's long position.| Floating Rate vs. Rationalpier 88 Convertible | Floating Rate vs. Putnam Convertible Securities | Floating Rate vs. Gabelli Convertible And | Floating Rate vs. Absolute Convertible Arbitrage |
| Furyax vs. Vanguard Total Stock | Furyax vs. Vanguard 500 Index | Furyax vs. Vanguard Total Stock | Furyax vs. Vanguard Total Stock |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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