Correlation Between Donegal Investment and FD Technologies
Can any of the company-specific risk be diversified away by investing in both Donegal Investment and FD Technologies 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 Donegal Investment and FD Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donegal Investment Group and FD Technologies PLC, you can compare the effects of market volatilities on Donegal Investment and FD Technologies 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 Donegal Investment with a short position of FD Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donegal Investment and FD Technologies.
Diversification Opportunities for Donegal Investment and FD Technologies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Donegal and GYQ is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Donegal Investment Group and FD Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FD Technologies PLC and Donegal Investment 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 Donegal Investment Group are associated (or correlated) with FD Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FD Technologies PLC has no effect on the direction of Donegal Investment i.e., Donegal Investment and FD Technologies go up and down completely randomly.
Pair Corralation between Donegal Investment and FD Technologies
Assuming the 90 days trading horizon Donegal Investment is expected to generate 24.57 times less return on investment than FD Technologies. But when comparing it to its historical volatility, Donegal Investment Group is 7.04 times less risky than FD Technologies. It trades about 0.04 of its potential returns per unit of risk. FD Technologies PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,830 in FD Technologies PLC on September 19, 2024 and sell it today you would earn a total of 290.00 from holding FD Technologies PLC or generate 15.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Donegal Investment Group vs. FD Technologies PLC
Performance |
Timeline |
Donegal Investment |
FD Technologies PLC |
Donegal Investment and FD Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Donegal Investment and FD Technologies
The main advantage of trading using opposite Donegal Investment and FD Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donegal Investment position performs unexpectedly, FD Technologies 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 FD Technologies will offset losses from the drop in FD Technologies' long position.Donegal Investment vs. FD Technologies PLC | Donegal Investment vs. Ryanair Holdings plc | Donegal Investment vs. Bank of Ireland | Donegal Investment vs. Dalata Hotel Group |
FD Technologies vs. Dalata Hotel Group | FD Technologies vs. Uniphar Group PLC | FD Technologies vs. KLP Aksje Fremvoksende | FD Technologies vs. Origin Enterprises Plc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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