Correlation Between Fs Multi-strategy and Emerald Banking

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

By analyzing existing cross correlation between Fs Multi Strategy Alt and Emerald Banking And, you can compare the effects of market volatilities on Fs Multi-strategy and Emerald Banking 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 Fs Multi-strategy with a short position of Emerald Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fs Multi-strategy and Emerald Banking.

Diversification Opportunities for Fs Multi-strategy and Emerald Banking

0.69

Correlation Coefficient

Fs Multi-strategy  Emerald Banking

Poor diversification

The 3 months correlation between FSMMX and Emerald is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fs Multi Strategy Alt and Emerald Banking And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Banking And and Fs Multi-strategy 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 Fs Multi Strategy Alt are associated (or correlated) with Emerald Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Banking And has no effect on the direction of Fs Multi-strategy i.e., Fs Multi-strategy and Emerald Banking go up and down completely randomly.

Pair Corralation between Fs Multi-strategy and Emerald Banking

Assuming the 90 days horizon Fs Multi-strategy is expected to generate 13.11 times less return on investment than Emerald Banking. But when comparing it to its historical volatility, Fs Multi Strategy Alt is 10.35 times less risky than Emerald Banking. It trades about 0.11 of its potential returns per unit of risk. Emerald Banking And is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,737  in Emerald Banking And on September 5, 2024 and sell it today you would earn a total of  455.00  from holding Emerald Banking And or generate 16.62% return on investment over 90 days.

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

Fs Multi Strategy Alt  vs.  Emerald Banking And

Fs Multi Strategy

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fs Multi Strategy Alt are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fs Multi-strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Emerald Banking And

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emerald Banking And are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Emerald Banking showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fs Multi-strategy and Emerald Banking

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

The idea behind Fs Multi Strategy Alt and Emerald Banking And 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.