Correlation Between Profunds Ultrashort and Fisher Investments

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

By analyzing existing cross correlation between Profunds Ultrashort Nasdaq 100 and Fisher Esg Stock, you can compare the effects of market volatilities on Profunds Ultrashort and Fisher Investments 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 Profunds Ultrashort with a short position of Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Ultrashort and Fisher Investments.

Diversification Opportunities for Profunds Ultrashort and Fisher Investments

-0.43

Correlation Coefficient

Profunds Ultrashort  Fisher Investments

Very good diversification

The 3 months correlation between Profunds and Fisher is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Ultrashort Nasdaq 100 and Fisher Esg Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments and Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100 are associated (or correlated) with Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Profunds Ultrashort i.e., Profunds Ultrashort and Fisher Investments go up and down completely randomly.

Pair Corralation between Profunds Ultrashort and Fisher Investments

Assuming the 90 days horizon Profunds Ultrashort Nasdaq 100 is expected to generate 2.87 times more return on investment than Fisher Investments. However, Profunds Ultrashort is 2.87 times more volatile than Fisher Esg Stock. It trades about 0.0 of its potential returns per unit of risk. Fisher Esg Stock is currently generating about -0.04 per unit of risk. If you would invest  2,376  in Profunds Ultrashort Nasdaq 100 on November 28, 2024 and sell it today you would lose (39.00) from holding Profunds Ultrashort Nasdaq 100 or give up 1.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Profunds Ultrashort Nasdaq 100  vs.  Fisher Esg Stock

Profunds Ultrashort

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profunds Ultrashort Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Profunds Ultrashort is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fisher Investments

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Profunds Ultrashort and Fisher Investments

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

The idea behind Profunds Ultrashort Nasdaq 100 and Fisher Esg Stock 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.