Correlation Between Fisher All and Fisher Small

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

By analyzing existing cross correlation between Fisher All Foreign and Fisher Small Cap, you can compare the effects of market volatilities on Fisher All and Fisher Small 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 Fisher All with a short position of Fisher Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher All and Fisher Small.

Diversification Opportunities for Fisher All and Fisher Small

-0.22

Correlation Coefficient

Fisher All  Fisher Small

Very good diversification

The 3 months correlation between Fisher and Fisher is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fisher All Foreign and Fisher Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Small Cap and Fisher All 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 Fisher All Foreign are associated (or correlated) with Fisher Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Small Cap has no effect on the direction of Fisher All i.e., Fisher All and Fisher Small go up and down completely randomly.

Pair Corralation between Fisher All and Fisher Small

Assuming the 90 days horizon Fisher All Foreign is expected to generate 0.74 times more return on investment than Fisher Small. However, Fisher All Foreign is 1.36 times less risky than Fisher Small. It trades about 0.15 of its potential returns per unit of risk. Fisher Small Cap is currently generating about -0.21 per unit of risk. If you would invest  1,220  in Fisher All Foreign on November 28, 2024 and sell it today you would earn a total of  87.00  from holding Fisher All Foreign or generate 7.13% return on investment over 90 days.

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

Fisher All Foreign  vs.  Fisher Small Cap

Fisher All Foreign

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher All Foreign are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fisher All may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Fisher Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fisher Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Fisher All and Fisher Small

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

The idea behind Fisher All Foreign and Fisher Small Cap 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.