Correlation Between Pinnacle Focused and FundX Investment

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

By analyzing existing cross correlation between Pinnacle Focused Opportunities and FundX Investment Trust, you can compare the effects of market volatilities on Pinnacle Focused and FundX Investment 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 Pinnacle Focused with a short position of FundX Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Focused and FundX Investment.

Diversification Opportunities for Pinnacle Focused and FundX Investment

-0.27

Correlation Coefficient

Pinnacle Focused  FundX Investment

Very good diversification

The 3 months correlation between Pinnacle and FundX is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Focused Opportunities and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment Trust and Pinnacle Focused 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 Pinnacle Focused Opportunities are associated (or correlated) with FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of Pinnacle Focused i.e., Pinnacle Focused and FundX Investment go up and down completely randomly.

Pair Corralation between Pinnacle Focused and FundX Investment

Given the investment horizon of 90 days Pinnacle Focused Opportunities is expected to generate 5.66 times more return on investment than FundX Investment. However, Pinnacle Focused is 5.66 times more volatile than FundX Investment Trust. It trades about 0.09 of its potential returns per unit of risk. FundX Investment Trust is currently generating about 0.13 per unit of risk. If you would invest  2,000  in Pinnacle Focused Opportunities on September 3, 2024 and sell it today you would earn a total of  1,517  from holding Pinnacle Focused Opportunities or generate 75.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.79%
Values	Daily Returns

Pinnacle Focused Opportunities  vs.  FundX Investment Trust

Pinnacle Focused Opp

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pinnacle Focused Opportunities are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Pinnacle Focused unveiled solid returns over the last few months and may actually be approaching a breakup point.

FundX Investment Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FundX Investment Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, FundX Investment is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pinnacle Focused and FundX Investment

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

The idea behind Pinnacle Focused Opportunities and FundX Investment Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.