Correlation Between BSIG Old and FS Credit

Can any of the company-specific risk be diversified away by investing in both BSIG Old 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 BSIG Old and FS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BSIG Old and FS Credit Opportunities, you can compare the effects of market volatilities on BSIG Old 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 BSIG Old with a short position of FS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSIG Old and FS Credit.

Diversification Opportunities for BSIG Old and FS Credit

0.0

Correlation Coefficient

BSIG Old  FS Credit

Pay attention - limited upside

The 3 months correlation between BSIG and FSCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BSIG Old 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 BSIG Old 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 BSIG Old 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 BSIG Old i.e., BSIG Old and FS Credit go up and down completely randomly.

Pair Corralation between BSIG Old and FS Credit

If you would invest  653.00  in FS Credit Opportunities on December 29, 2024 and sell it today you would earn a total of  54.00  from holding FS Credit Opportunities or generate 8.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BSIG Old  vs.  FS Credit Opportunities

BSIG Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BSIG Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, BSIG Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FS Credit Opportunities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FS Credit Opportunities are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, FS Credit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BSIG Old and FS Credit

The main advantage of trading using opposite BSIG Old and FS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSIG Old 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.

The idea behind BSIG Old and FS Credit Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.