Correlation Between Fulcrum Diversified and Intal High

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

By analyzing existing cross correlation between Fulcrum Diversified Absolute and Intal High Relative, you can compare the effects of market volatilities on Fulcrum Diversified and Intal High 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 Fulcrum Diversified with a short position of Intal High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and Intal High.

Diversification Opportunities for Fulcrum Diversified and Intal High

0.01

Correlation Coefficient

Fulcrum Diversified  Intal High

Significant diversification

The 3 months correlation between Fulcrum and Intal is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and Intal High Relative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intal High Relative and Fulcrum Diversified 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 Fulcrum Diversified Absolute are associated (or correlated) with Intal High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intal High Relative has no effect on the direction of Fulcrum Diversified i.e., Fulcrum Diversified and Intal High go up and down completely randomly.

Pair Corralation between Fulcrum Diversified and Intal High

Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to under-perform the Intal High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fulcrum Diversified Absolute is 2.1 times less risky than Intal High. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Intal High Relative is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,251  in Intal High Relative on December 21, 2024 and sell it today you would earn a total of  111.00  from holding Intal High Relative or generate 8.87% return on investment over 90 days.

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

Fulcrum Diversified Absolute  vs.  Intal High Relative

Fulcrum Diversified

Risk-Adjusted Performance

Very Weak

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

Intal High Relative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intal High Relative are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Intal High may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fulcrum Diversified and Intal High

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

The idea behind Fulcrum Diversified Absolute and Intal High Relative 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.