Correlation Between Counterpoint Tactical and Fmasx

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

By analyzing existing cross correlation between Counterpoint Tactical Equity and Fmasx, you can compare the effects of market volatilities on Counterpoint Tactical and Fmasx 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 Counterpoint Tactical with a short position of Fmasx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Counterpoint Tactical and Fmasx.

Diversification Opportunities for Counterpoint Tactical and Fmasx

0.67

Correlation Coefficient

Counterpoint Tactical  Fmasx

Poor diversification

The 3 months correlation between Counterpoint and Fmasx is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Counterpoint Tactical Equity and Fmasx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fmasx and Counterpoint Tactical 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 Counterpoint Tactical Equity are associated (or correlated) with Fmasx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fmasx has no effect on the direction of Counterpoint Tactical i.e., Counterpoint Tactical and Fmasx go up and down completely randomly.

Pair Corralation between Counterpoint Tactical and Fmasx

Assuming the 90 days horizon Counterpoint Tactical Equity is expected to generate 1.0 times more return on investment than Fmasx. However, Counterpoint Tactical Equity is 1.0 times less risky than Fmasx. It trades about 0.04 of its potential returns per unit of risk. Fmasx is currently generating about 0.03 per unit of risk. If you would invest  2,105  in Counterpoint Tactical Equity on October 26, 2024 and sell it today you would earn a total of  35.00  from holding Counterpoint Tactical Equity or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Counterpoint Tactical Equity  vs.  Fmasx

Counterpoint Tactical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Counterpoint Tactical Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Counterpoint Tactical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fmasx

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fmasx are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fmasx is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Counterpoint Tactical and Fmasx

The main advantage of trading using opposite Counterpoint Tactical and Fmasx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Counterpoint Tactical position performs unexpectedly, Fmasx 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 Fmasx will offset losses from the drop in Fmasx's long position.

The idea behind Counterpoint Tactical Equity and Fmasx 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.