Correlation Between Ft 7934: and Active M

Can any of the company-specific risk be diversified away by investing in both Ft 7934: and Active M 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 Ft 7934: and Active M into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ft 7934 Corporate and Active M International, you can compare the effects of market volatilities on Ft 7934: and Active M 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 Ft 7934: with a short position of Active M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ft 7934: and Active M.

Diversification Opportunities for Ft 7934: and Active M

0.75

Correlation Coefficient

Ft 7934:  Active M

Poor diversification

The 3 months correlation between FZNQEX and Active is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ft 7934 Corporate and Active M International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active M International and Ft 7934: 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 Ft 7934 Corporate are associated (or correlated) with Active M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active M International has no effect on the direction of Ft 7934: i.e., Ft 7934: and Active M go up and down completely randomly.

Pair Corralation between Ft 7934: and Active M

Assuming the 90 days trading horizon Ft 7934: is expected to generate 22.3 times less return on investment than Active M. But when comparing it to its historical volatility, Ft 7934 Corporate is 9.14 times less risky than Active M. It trades about 0.09 of its potential returns per unit of risk. Active M International is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,061  in Active M International on December 20, 2024 and sell it today you would earn a total of  139.00  from holding Active M International or generate 13.1% return on investment over 90 days.

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

Ft 7934 Corporate  vs.  Active M International

Ft 7934 Corporate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ft 7934 Corporate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ft 7934: is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Active M International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Active M International are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Active M showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ft 7934: and Active M

The main advantage of trading using opposite Ft 7934: and Active M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ft 7934: position performs unexpectedly, Active M 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 Active M will offset losses from the drop in Active M's long position.

The idea behind Ft 7934 Corporate and Active M International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..