Correlation Between Smallcap Growth and Fs Managed

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

By analyzing existing cross correlation between Smallcap Growth Fund and Fs Managed Futures, you can compare the effects of market volatilities on Smallcap Growth and Fs Managed 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 Smallcap Growth with a short position of Fs Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Fs Managed.

Diversification Opportunities for Smallcap Growth and Fs Managed

-0.21

Correlation Coefficient

Smallcap Growth  Fs Managed

Very good diversification

The 3 months correlation between Smallcap and FMFFX is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Fs Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Managed Futures and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Fs Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Managed Futures has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Fs Managed go up and down completely randomly.

Pair Corralation between Smallcap Growth and Fs Managed

If you would invest  870.00  in Fs Managed Futures on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Fs Managed Futures or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Smallcap Growth Fund  vs.  Fs Managed Futures

Smallcap Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fs Managed Futures

Risk-Adjusted Performance

0 of 100

Solid

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

Pair Trading with Smallcap Growth and Fs Managed

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

The idea behind Smallcap Growth Fund and Fs Managed Futures 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.