Correlation Between Balanced Allocation and Fs Multi-strategy
Can any of the company-specific risk be diversified away by investing in both Balanced Allocation 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 Balanced Allocation 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 Balanced Allocation Fund and Fs Multi Strategy Alt, you can compare the effects of market volatilities on Balanced Allocation 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 Balanced Allocation with a short position of Fs Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Allocation and Fs Multi-strategy.
Diversification Opportunities for Balanced Allocation and Fs Multi-strategy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and FSMSX is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Allocation 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 Balanced Allocation 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 Balanced Allocation 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 Balanced Allocation i.e., Balanced Allocation and Fs Multi-strategy go up and down completely randomly.
Pair Corralation between Balanced Allocation and Fs Multi-strategy
Assuming the 90 days horizon Balanced Allocation Fund is expected to generate 1.98 times more return on investment than Fs Multi-strategy. However, Balanced Allocation is 1.98 times more volatile than Fs Multi Strategy Alt. It trades about 0.24 of its potential returns per unit of risk. Fs Multi Strategy Alt is currently generating about 0.3 per unit of risk. If you would invest 1,193 in Balanced Allocation Fund on May 29, 2025 and sell it today you would earn a total of 59.00 from holding Balanced Allocation Fund or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Balanced Allocation Fund vs. Fs Multi Strategy Alt
Performance |
| Timeline |
| Balanced Allocation |
| Fs Multi Strategy |
Balanced Allocation and Fs Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Allocation and Fs Multi-strategy
The main advantage of trading using opposite Balanced Allocation and Fs Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Allocation 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.| Balanced Allocation vs. Fabwx | Balanced Allocation vs. Fbanjx | Balanced Allocation vs. Qs Large Cap | Balanced Allocation vs. Abr 7525 Volatility |
| Fs Multi-strategy vs. Qs Large Cap | Fs Multi-strategy vs. Vest Large Cap | Fs Multi-strategy vs. Tax Managed Large Cap | Fs Multi-strategy vs. Calvert Large Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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