Correlation Between Enhanced and Fs Managed

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

By analyzing existing cross correlation between Enhanced Large Pany and Fs Managed Futures, you can compare the effects of market volatilities on Enhanced and Fs Managed 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 Enhanced with a short position of Fs Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced and Fs Managed.

Diversification Opportunities for Enhanced and Fs Managed

-0.34

Correlation Coefficient

Enhanced  Fs Managed

Very good diversification

The 3 months correlation between Enhanced and FMFFX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Large Pany and Fs Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Managed Futures and Enhanced 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 Enhanced Large Pany are associated (or correlated) with Fs Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Managed Futures has no effect on the direction of Enhanced i.e., Enhanced and Fs Managed go up and down completely randomly.

Pair Corralation between Enhanced and Fs Managed

Assuming the 90 days horizon Enhanced Large Pany is expected to generate 1.17 times more return on investment than Fs Managed. However, Enhanced is 1.17 times more volatile than Fs Managed Futures. It trades about 0.12 of its potential returns per unit of risk. Fs Managed Futures is currently generating about -0.02 per unit of risk. If you would invest  1,065  in Enhanced Large Pany on October 24, 2024 and sell it today you would earn a total of  481.00  from holding Enhanced Large Pany or generate 45.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.91%
Values	Daily Returns

Enhanced Large Pany  vs.  Fs Managed Futures

Enhanced Large Pany

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enhanced Large Pany are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fs Managed Futures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fs Managed Futures has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Fs Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enhanced and Fs Managed

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

The idea behind Enhanced Large Pany and Fs Managed Futures 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 Stocks Directory module to find actively traded stocks across global markets.