Correlation Between FlexShares Credit and Fieldstone UVA
Can any of the company-specific risk be diversified away by investing in both FlexShares Credit and Fieldstone UVA 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 FlexShares Credit and Fieldstone UVA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares Credit Scored Corporate and Fieldstone UVA Unconstrained, you can compare the effects of market volatilities on FlexShares Credit and Fieldstone UVA 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 FlexShares Credit with a short position of Fieldstone UVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Credit and Fieldstone UVA.
Diversification Opportunities for FlexShares Credit and Fieldstone UVA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FlexShares and Fieldstone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Credit Scored Corpo and Fieldstone UVA Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fieldstone UVA Uncon and FlexShares Credit 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 FlexShares Credit Scored Corporate are associated (or correlated) with Fieldstone UVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fieldstone UVA Uncon has no effect on the direction of FlexShares Credit i.e., FlexShares Credit and Fieldstone UVA go up and down completely randomly.
Pair Corralation between FlexShares Credit and Fieldstone UVA
Given the investment horizon of 90 days FlexShares Credit Scored Corporate is expected to generate 0.56 times more return on investment than Fieldstone UVA. However, FlexShares Credit Scored Corporate is 1.79 times less risky than Fieldstone UVA. It trades about 0.08 of its potential returns per unit of risk. Fieldstone UVA Unconstrained is currently generating about 0.03 per unit of risk. If you would invest 4,434 in FlexShares Credit Scored Corporate on August 26, 2024 and sell it today you would earn a total of 364.00 from holding FlexShares Credit Scored Corporate or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShares Credit Scored Corpo vs. Fieldstone UVA Unconstrained
Performance |
| Timeline |
| FlexShares Credit |
| Fieldstone UVA Uncon |
FlexShares Credit and Fieldstone UVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares Credit and Fieldstone UVA
The main advantage of trading using opposite FlexShares Credit and Fieldstone UVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares Credit position performs unexpectedly, Fieldstone UVA 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 Fieldstone UVA will offset losses from the drop in Fieldstone UVA's long position.| FlexShares Credit vs. iShares ESG USD | FlexShares Credit vs. FlexShares Disciplined Duration | FlexShares Credit vs. iShares ESG 1 5 | FlexShares Credit vs. First Trust Emerging |
| Fieldstone UVA vs. FlexShares Credit Scored Corporate | Fieldstone UVA vs. FlexShares Disciplined Duration | Fieldstone UVA vs. FlexShares Quality Large | Fieldstone UVA vs. First Trust Emerging |
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 Stocks Directory module to find actively traded stocks across global markets.
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