Correlation Between Fa 529 and Gotham Index
Can any of the company-specific risk be diversified away by investing in both Fa 529 and Gotham Index 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 Fa 529 and Gotham Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Gotham Index Plus, you can compare the effects of market volatilities on Fa 529 and Gotham Index 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 Fa 529 with a short position of Gotham Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Gotham Index.
Diversification Opportunities for Fa 529 and Gotham Index
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FFCGX and Gotham is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Gotham Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Index Plus and Fa 529 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 Fa 529 Aggressive are associated (or correlated) with Gotham Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Index Plus has no effect on the direction of Fa 529 i.e., Fa 529 and Gotham Index go up and down completely randomly.
Pair Corralation between Fa 529 and Gotham Index
Assuming the 90 days horizon Fa 529 is expected to generate 1.36 times less return on investment than Gotham Index. But when comparing it to its historical volatility, Fa 529 Aggressive is 1.17 times less risky than Gotham Index. It trades about 0.11 of its potential returns per unit of risk. Gotham Index Plus is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,065 in Gotham Index Plus on September 1, 2025 and sell it today you would earn a total of 217.00 from holding Gotham Index Plus or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Gotham Index Plus
Performance |
| Timeline |
| Fa 529 Aggressive |
| Gotham Index Plus |
Fa 529 and Gotham Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Gotham Index
The main advantage of trading using opposite Fa 529 and Gotham Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, Gotham Index 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 Gotham Index will offset losses from the drop in Gotham Index's long position.| Fa 529 vs. Vanguard Total Stock | Fa 529 vs. Vanguard 500 Index | Fa 529 vs. Vanguard Total Stock | Fa 529 vs. Vanguard Total Stock |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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