Correlation Between Fisher Fixed and American Balanced
Can any of the company-specific risk be diversified away by investing in both Fisher Fixed and American Balanced 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 Fixed and American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Fixed Income and American Balanced Fund, you can compare the effects of market volatilities on Fisher Fixed and American Balanced 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 Fixed with a short position of American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Fixed and American Balanced.
Diversification Opportunities for Fisher Fixed and American Balanced
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fisher and American is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Fixed Income and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced and Fisher Fixed 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 Fixed Income are associated (or correlated) with American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Fisher Fixed i.e., Fisher Fixed and American Balanced go up and down completely randomly.
Pair Corralation between Fisher Fixed and American Balanced
Assuming the 90 days horizon Fisher Fixed Income is expected to generate 0.28 times more return on investment than American Balanced. However, Fisher Fixed Income is 3.56 times less risky than American Balanced. It trades about 0.01 of its potential returns per unit of risk. American Balanced Fund is currently generating about -0.12 per unit of risk. If you would invest 869.00 in Fisher Fixed Income on January 15, 2025 and sell it today you would earn a total of 1.00 from holding Fisher Fixed Income or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Fixed Income vs. American Balanced Fund
Performance |
| Timeline |
| Fisher Fixed Income |
| American Balanced |
Fisher Fixed and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Fixed and American Balanced
The main advantage of trading using opposite Fisher Fixed and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Fixed position performs unexpectedly, American Balanced 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 American Balanced will offset losses from the drop in American Balanced's long position.| Fisher Fixed vs. Franklin Mutual Global | Fisher Fixed vs. Ab Global Bond | Fisher Fixed vs. Ab Global Risk | Fisher Fixed vs. Summit Global Investments |
| American Balanced vs. Calvert Bond Portfolio | American Balanced vs. Morningstar Defensive Bond | American Balanced vs. Ab Bond Inflation | American Balanced vs. Versatile Bond Portfolio |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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