Correlation Between Nelnet and FS Credit
Can any of the company-specific risk be diversified away by investing in both Nelnet and FS Credit 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 Nelnet and FS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nelnet Inc and FS Credit Opportunities, you can compare the effects of market volatilities on Nelnet and FS Credit 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 Nelnet with a short position of FS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nelnet and FS Credit.
Diversification Opportunities for Nelnet and FS Credit
Very good diversification
The 3 months correlation between Nelnet and FSCO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nelnet Inc and FS Credit Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Credit Opportunities and Nelnet 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 Nelnet Inc are associated (or correlated) with FS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Credit Opportunities has no effect on the direction of Nelnet i.e., Nelnet and FS Credit go up and down completely randomly.
Pair Corralation between Nelnet and FS Credit
Considering the 90-day investment horizon Nelnet Inc is expected to under-perform the FS Credit. In addition to that, Nelnet is 1.82 times more volatile than FS Credit Opportunities. It trades about -0.01 of its total potential returns per unit of risk. FS Credit Opportunities is currently generating about 0.13 per unit of volatility. If you would invest 650.00 in FS Credit Opportunities on October 24, 2024 and sell it today you would earn a total of 52.00 from holding FS Credit Opportunities or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nelnet Inc vs. FS Credit Opportunities
Performance |
| Timeline |
| Nelnet Inc |
| FS Credit Opportunities |
Nelnet and FS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nelnet and FS Credit
The main advantage of trading using opposite Nelnet and FS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nelnet position performs unexpectedly, FS Credit 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 Credit will offset losses from the drop in FS Credit's long position.| Nelnet vs. SLM Corp Pb | Nelnet vs. FirstCash | Nelnet vs. Federal Agricultural Mortgage | Nelnet vs. Navient Corp |
| FS Credit vs. MFS Investment Grade | FS Credit vs. Eaton Vance National | FS Credit vs. Federated Premier Municipal | FS Credit vs. Investcorp Credit Management |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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