Correlation Between Financial Investors and IXSE

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

By analyzing existing cross correlation between Financial Investors Trust and IXSE, you can compare the effects of market volatilities on Financial Investors and IXSE 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 Financial Investors with a short position of IXSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Investors and IXSE.

Diversification Opportunities for Financial Investors and IXSE

0.0

Correlation Coefficient

Financial Investors  IXSE

Pay attention - limited upside

The 3 months correlation between Financial and IXSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Financial Investors Trust and IXSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXSE and Financial Investors 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 Financial Investors Trust are associated (or correlated) with IXSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXSE has no effect on the direction of Financial Investors i.e., Financial Investors and IXSE go up and down completely randomly.

Pair Corralation between Financial Investors and IXSE

If you would invest (100.00) in IXSE on December 28, 2024 and sell it today you would earn a total of  100.00  from holding IXSE or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Financial Investors Trust  vs.  IXSE

Financial Investors Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Financial Investors Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Financial Investors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IXSE

Risk-Adjusted Performance

Very Weak

Over the last 90 days IXSE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IXSE is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Financial Investors and IXSE

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

The idea behind Financial Investors Trust and IXSE 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.