Correlation Between Fitipower Integrated and FocalTech Systems

Can any of the company-specific risk be diversified away by investing in both Fitipower Integrated and FocalTech Systems 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 Fitipower Integrated and FocalTech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fitipower Integrated Technology and FocalTech Systems Co, you can compare the effects of market volatilities on Fitipower Integrated and FocalTech Systems 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 Fitipower Integrated with a short position of FocalTech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fitipower Integrated and FocalTech Systems.

Diversification Opportunities for Fitipower Integrated and FocalTech Systems

0.1

Correlation Coefficient

Fitipower Integrated  FocalTech Systems

Average diversification

The 3 months correlation between Fitipower and FocalTech is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fitipower Integrated Technolog and FocalTech Systems Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FocalTech Systems and Fitipower Integrated 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 Fitipower Integrated Technology are associated (or correlated) with FocalTech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FocalTech Systems has no effect on the direction of Fitipower Integrated i.e., Fitipower Integrated and FocalTech Systems go up and down completely randomly.

Pair Corralation between Fitipower Integrated and FocalTech Systems

Assuming the 90 days trading horizon Fitipower Integrated Technology is expected to under-perform the FocalTech Systems. In addition to that, Fitipower Integrated is 1.07 times more volatile than FocalTech Systems Co. It trades about -0.06 of its total potential returns per unit of risk. FocalTech Systems Co is currently generating about 0.08 per unit of volatility. If you would invest  8,100  in FocalTech Systems Co on September 2, 2024 and sell it today you would earn a total of  690.00  from holding FocalTech Systems Co or generate 8.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fitipower Integrated Technolog  vs.  FocalTech Systems Co

Fitipower Integrated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fitipower Integrated Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

FocalTech Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FocalTech Systems Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, FocalTech Systems may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fitipower Integrated and FocalTech Systems

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

The idea behind Fitipower Integrated Technology and FocalTech Systems Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.