Correlation Between Fbec Worldwide and Barfresh Food

Can any of the company-specific risk be diversified away by investing in both Fbec Worldwide and Barfresh Food 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 Fbec Worldwide and Barfresh Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fbec Worldwide and Barfresh Food Group, you can compare the effects of market volatilities on Fbec Worldwide and Barfresh Food 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 Fbec Worldwide with a short position of Barfresh Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fbec Worldwide and Barfresh Food.

Diversification Opportunities for Fbec Worldwide and Barfresh Food

0.52

Correlation Coefficient

Fbec Worldwide  Barfresh Food

Very weak diversification

The 3 months correlation between Fbec and Barfresh is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fbec Worldwide and Barfresh Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barfresh Food Group and Fbec Worldwide 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 Fbec Worldwide are associated (or correlated) with Barfresh Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barfresh Food Group has no effect on the direction of Fbec Worldwide i.e., Fbec Worldwide and Barfresh Food go up and down completely randomly.

Pair Corralation between Fbec Worldwide and Barfresh Food

Given the investment horizon of 90 days Fbec Worldwide is expected to generate 29.07 times more return on investment than Barfresh Food. However, Fbec Worldwide is 29.07 times more volatile than Barfresh Food Group. It trades about 0.25 of its potential returns per unit of risk. Barfresh Food Group is currently generating about -0.04 per unit of risk. If you would invest  0.10  in Fbec Worldwide on August 30, 2024 and sell it today you would lose (0.02) from holding Fbec Worldwide or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Fbec Worldwide  vs.  Barfresh Food Group

Fbec Worldwide

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fbec Worldwide are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Fbec Worldwide exhibited solid returns over the last few months and may actually be approaching a breakup point.

Barfresh Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barfresh Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Fbec Worldwide and Barfresh Food

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

The idea behind Fbec Worldwide and Barfresh Food Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..