Correlation Between Cornerstone Strategic and Focus Financial
Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic and Focus Financial 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 Cornerstone Strategic and Focus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornerstone Strategic Return and Focus Financial Partners, you can compare the effects of market volatilities on Cornerstone Strategic and Focus Financial 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 Cornerstone Strategic with a short position of Focus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Focus Financial.
Diversification Opportunities for Cornerstone Strategic and Focus Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cornerstone and Focus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Return and Focus Financial Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Financial Partners and Cornerstone Strategic 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 Cornerstone Strategic Return are associated (or correlated) with Focus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Financial Partners has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Focus Financial go up and down completely randomly.
Pair Corralation between Cornerstone Strategic and Focus Financial
If you would invest 758.00 in Cornerstone Strategic Return on February 5, 2024 and sell it today you would lose (1.00) from holding Cornerstone Strategic Return or give up 0.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Cornerstone Strategic Return vs. Focus Financial Partners
Performance |
Timeline |
Cornerstone Strategic |
Focus Financial Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cornerstone Strategic and Focus Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cornerstone Strategic and Focus Financial
The main advantage of trading using opposite Cornerstone Strategic and Focus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic position performs unexpectedly, Focus Financial 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 Focus Financial will offset losses from the drop in Focus Financial's long position.Cornerstone Strategic vs. John Hancock Income | Cornerstone Strategic vs. MFS High Income | Cornerstone Strategic vs. MFS Investment Grade | Cornerstone Strategic vs. AllianzGI Convertible 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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