Correlation Between FnGuide and Formetal
Can any of the company-specific risk be diversified away by investing in both FnGuide and Formetal 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 FnGuide and Formetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FnGuide and Formetal Co, you can compare the effects of market volatilities on FnGuide and Formetal 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 FnGuide with a short position of Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of FnGuide and Formetal.
Diversification Opportunities for FnGuide and Formetal
Good diversification
The 3 months correlation between FnGuide and Formetal is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding FnGuide and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal and FnGuide 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 FnGuide are associated (or correlated) with Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of FnGuide i.e., FnGuide and Formetal go up and down completely randomly.
Pair Corralation between FnGuide and Formetal
Assuming the 90 days trading horizon FnGuide is expected to under-perform the Formetal. In addition to that, FnGuide is 2.86 times more volatile than Formetal Co. It trades about -0.09 of its total potential returns per unit of risk. Formetal Co is currently generating about 0.12 per unit of volatility. If you would invest 272,000 in Formetal Co on September 15, 2024 and sell it today you would earn a total of 65,500 from holding Formetal Co or generate 24.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.31% |
Values | Daily Returns |
FnGuide vs. Formetal Co
Performance |
Timeline |
FnGuide |
Formetal |
FnGuide and Formetal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FnGuide and Formetal
The main advantage of trading using opposite FnGuide and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FnGuide position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.FnGuide vs. Formetal Co | FnGuide vs. Echomarketing CoLtd | FnGuide vs. Heungkuk Metaltech CoLtd | FnGuide vs. SK Chemicals Co |
Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
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 CEOs Directory module to screen CEOs from public companies around the world.
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