Correlation Between NYSE Composite and Fs Multi-strategy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite 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 NYSE Composite and Fs Multi Strategy Alt, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Fs Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fs Multi-strategy.
Diversification Opportunities for NYSE Composite and Fs Multi-strategy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and FSMMX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Fs Multi-strategy go up and down completely randomly.
Pair Corralation between NYSE Composite and Fs Multi-strategy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.41 times more return on investment than Fs Multi-strategy. However, NYSE Composite is 3.41 times more volatile than Fs Multi Strategy Alt. It trades about 0.14 of its potential returns per unit of risk. Fs Multi Strategy Alt is currently generating about 0.03 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fs Multi Strategy Alt
Performance |
| Timeline |
NYSE Composite and Fs Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fs Multi Strategy Alt
Pair trading matchups for Fs Multi-strategy
Pair Trading with NYSE Composite and Fs Multi-strategy
The main advantage of trading using opposite NYSE Composite and Fs Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Fs Multi-strategy vs. The Gabelli Small | Fs Multi-strategy vs. Harbor Diversified International | Fs Multi-strategy vs. Western Asset Diversified | Fs Multi-strategy vs. Delaware Limited Term Diversified |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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