Correlation Between Tax-managed and Fkhemx

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

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

Diversification Opportunities for Tax-managed and Fkhemx

0.99

Correlation Coefficient

Tax-managed  Fkhemx

No risk reduction

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

Pair Corralation between Tax-managed and Fkhemx

Assuming the 90 days horizon Tax Managed Large Cap is expected to generate 1.0 times more return on investment than Fkhemx. However, Tax-managed is 1.0 times more volatile than Fkhemx. It trades about 0.24 of its potential returns per unit of risk. Fkhemx is currently generating about 0.2 per unit of risk. If you would invest  8,066  in Tax Managed Large Cap on May 7, 2025 and sell it today you would earn a total of  962.00  from holding Tax Managed Large Cap or generate 11.93% return on investment over 90 days.

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

Tax Managed Large Cap  vs.  Fkhemx

Tax Managed Large

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tax Managed Large Cap are ranked lower than 18 (%) 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 September 2025.

Fkhemx

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fkhemx are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Fkhemx may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tax-managed and Fkhemx

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

The idea behind Tax Managed Large Cap and Fkhemx 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.