Correlation Between Fisher Investments and Tax-managed

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

By analyzing existing cross correlation between Fisher Small Cap and Tax Managed Mid Small, you can compare the effects of market volatilities on Fisher Investments and Tax-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 Fisher Investments with a short position of Tax-managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Investments and Tax-managed.

Diversification Opportunities for Fisher Investments and Tax-managed

0.99

Correlation Coefficient

Fisher Investments  Tax-managed

No risk reduction

The 3 months correlation between Fisher and Tax-managed is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Tax Managed Mid Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Managed Mid 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 Small Cap are associated (or correlated) with Tax-managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Managed Mid has no effect on the direction of Fisher Investments i.e., Fisher Investments and Tax-managed go up and down completely randomly.

Pair Corralation between Fisher Investments and Tax-managed

Assuming the 90 days horizon Fisher Small Cap is expected to generate 1.19 times more return on investment than Tax-managed. However, Fisher Investments is 1.19 times more volatile than Tax Managed Mid Small. It trades about 0.16 of its potential returns per unit of risk. Tax Managed Mid Small is currently generating about 0.16 per unit of risk. If you would invest  1,192  in Fisher Small Cap on September 3, 2024 and sell it today you would earn a total of  161.00  from holding Fisher Small Cap or generate 13.51% return on investment over 90 days.

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

Fisher Small Cap  vs.  Tax Managed Mid Small

Fisher Investments

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Tax Managed Mid

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tax Managed Mid Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Tax-managed may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fisher Investments and Tax-managed

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

The idea behind Fisher Small Cap and Tax Managed Mid Small 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.