Correlation Between Fisher Large and California High

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

By analyzing existing cross correlation between Fisher Large Cap and California High Yield Municipal, you can compare the effects of market volatilities on Fisher Large and California High 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 Large with a short position of California High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Large and California High.

Diversification Opportunities for Fisher Large and California High

0.14

Correlation Coefficient

Fisher Large  California High

Average diversification

The 3 months correlation between Fisher and California is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and California High Yield Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California High Yield and Fisher Large 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 Large Cap are associated (or correlated) with California High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California High Yield has no effect on the direction of Fisher Large i.e., Fisher Large and California High go up and down completely randomly.

Pair Corralation between Fisher Large and California High

Assuming the 90 days horizon Fisher Large Cap is expected to generate 3.37 times more return on investment than California High. However, Fisher Large is 3.37 times more volatile than California High Yield Municipal. It trades about 0.1 of its potential returns per unit of risk. California High Yield Municipal is currently generating about 0.04 per unit of risk. If you would invest  1,175  in Fisher Large Cap on September 26, 2024 and sell it today you would earn a total of  646.00  from holding Fisher Large Cap or generate 54.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fisher Large Cap  vs.  California High Yield Municipa

Fisher Large Cap

Risk-Adjusted Performance

2 of 100

Weak

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

California High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days California High Yield Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, California High 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 Large and California High

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

The idea behind Fisher Large Cap and California High Yield Municipal 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.