Correlation Between Fisher Investments and New World

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

By analyzing existing cross correlation between Fisher Fixed Income and New World Fund, you can compare the effects of market volatilities on Fisher Investments and New World 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 Investments with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Investments and New World.

Diversification Opportunities for Fisher Investments and New World

0.54

Correlation Coefficient

Fisher Investments  New World

Very weak diversification

The 3 months correlation between Fisher and New is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Fixed Income and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund and Fisher Investments 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 Fixed Income are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Fisher Investments i.e., Fisher Investments and New World go up and down completely randomly.

Pair Corralation between Fisher Investments and New World

Assuming the 90 days horizon Fisher Fixed Income is expected to generate 0.35 times more return on investment than New World. However, Fisher Fixed Income is 2.86 times less risky than New World. It trades about 0.11 of its potential returns per unit of risk. New World Fund is currently generating about 0.03 per unit of risk. If you would invest  860.00  in Fisher Fixed Income on December 28, 2024 and sell it today you would earn a total of  18.00  from holding Fisher Fixed Income or generate 2.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Fisher Fixed Income  vs.  New World Fund

Fisher Fixed Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Fixed Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Fisher Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

New World Fund

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in New World Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, New World is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fisher Investments and New World

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

The idea behind Fisher Fixed Income and New World Fund 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.