Correlation Between Science Technology and Fs Multi-strategy
Can any of the company-specific risk be diversified away by investing in both Science Technology and Fs Multi-strategy 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 Science Technology and Fs Multi-strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Technology Fund and Fs Multi Strategy Alt, you can compare the effects of market volatilities on Science Technology and Fs Multi-strategy 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 Science Technology with a short position of Fs Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Technology and Fs Multi-strategy.
Diversification Opportunities for Science Technology and Fs Multi-strategy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Science and FSMSX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Science Technology Fund and Fs Multi Strategy Alt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Multi Strategy and Science Technology 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 Science Technology Fund are associated (or correlated) with Fs Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Multi Strategy has no effect on the direction of Science Technology i.e., Science Technology and Fs Multi-strategy go up and down completely randomly.
Pair Corralation between Science Technology and Fs Multi-strategy
Assuming the 90 days horizon Science Technology Fund is expected to generate 6.55 times more return on investment than Fs Multi-strategy. However, Science Technology is 6.55 times more volatile than Fs Multi Strategy Alt. It trades about 0.3 of its potential returns per unit of risk. Fs Multi Strategy Alt is currently generating about 0.2 per unit of risk. If you would invest 2,494 in Science Technology Fund on April 28, 2025 and sell it today you would earn a total of 572.00 from holding Science Technology Fund or generate 22.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Science Technology Fund vs. Fs Multi Strategy Alt
Performance |
Timeline |
Science Technology |
Fs Multi Strategy |
Science Technology and Fs Multi-strategy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Science Technology and Fs Multi-strategy
The main advantage of trading using opposite Science Technology and Fs Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Technology position performs unexpectedly, Fs Multi-strategy 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 Fs Multi-strategy will offset losses from the drop in Fs Multi-strategy's long position.Science Technology vs. Qs Growth Fund | Science Technology vs. Needham Aggressive Growth | Science Technology vs. T Rowe Price | Science Technology vs. Upright Growth Income |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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