Correlation Between FMS Enterprises and Augwind Energy
Can any of the company-specific risk be diversified away by investing in both FMS Enterprises and Augwind Energy 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 FMS Enterprises and Augwind Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FMS Enterprises Migun and Augwind Energy Tech, you can compare the effects of market volatilities on FMS Enterprises and Augwind Energy 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 FMS Enterprises with a short position of Augwind Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMS Enterprises and Augwind Energy.
Diversification Opportunities for FMS Enterprises and Augwind Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FMS and Augwind is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding FMS Enterprises Migun and Augwind Energy Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augwind Energy Tech and FMS Enterprises 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 FMS Enterprises Migun are associated (or correlated) with Augwind Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augwind Energy Tech has no effect on the direction of FMS Enterprises i.e., FMS Enterprises and Augwind Energy go up and down completely randomly.
Pair Corralation between FMS Enterprises and Augwind Energy
Assuming the 90 days trading horizon FMS Enterprises is expected to generate 5.43 times less return on investment than Augwind Energy. But when comparing it to its historical volatility, FMS Enterprises Migun is 2.92 times less risky than Augwind Energy. It trades about 0.18 of its potential returns per unit of risk. Augwind Energy Tech is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 23,100 in Augwind Energy Tech on September 26, 2024 and sell it today you would earn a total of 33,010 from holding Augwind Energy Tech or generate 142.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 97.83% |
Values | Daily Returns |
FMS Enterprises Migun vs. Augwind Energy Tech
Performance |
Timeline |
FMS Enterprises Migun |
Augwind Energy Tech |
FMS Enterprises and Augwind Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FMS Enterprises and Augwind Energy
The main advantage of trading using opposite FMS Enterprises and Augwind Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMS Enterprises position performs unexpectedly, Augwind Energy 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 Augwind Energy will offset losses from the drop in Augwind Energy's long position.FMS Enterprises vs. Delek Automotive Systems | FMS Enterprises vs. Alony Hetz Properties | FMS Enterprises vs. Elbit Systems | FMS Enterprises vs. First International Bank |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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