Correlation Between Princeton Longshort and Fabxx

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

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

Diversification Opportunities for Princeton Longshort and Fabxx

0.0

Correlation Coefficient

Princeton Longshort  Fabxx

Pay attention - limited upside

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

Pair Corralation between Princeton Longshort and Fabxx

If you would invest (100.00) in Princeton Longshort Treasury on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Princeton Longshort Treasury 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

Princeton Longshort Treasury  vs.  Fabxx

Princeton Longshort

Risk-Adjusted Performance

Very Weak

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

Fabxx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fabxx 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Princeton Longshort and Fabxx

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

The idea behind Princeton Longshort Treasury and Fabxx 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.