Correlation Between FMS Enterprises and Intergama

Can any of the company-specific risk be diversified away by investing in both FMS Enterprises and Intergama 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 Intergama 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 Intergama, you can compare the effects of market volatilities on FMS Enterprises and Intergama 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 Intergama. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMS Enterprises and Intergama.

Diversification Opportunities for FMS Enterprises and Intergama

0.64

Correlation Coefficient

FMS Enterprises  Intergama

Poor diversification

The 3 months correlation between FMS and Intergama is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FMS Enterprises Migun and Intergama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intergama 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 Intergama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intergama has no effect on the direction of FMS Enterprises i.e., FMS Enterprises and Intergama go up and down completely randomly.

Pair Corralation between FMS Enterprises and Intergama

Assuming the 90 days trading horizon FMS Enterprises is expected to generate 2.72 times less return on investment than Intergama. But when comparing it to its historical volatility, FMS Enterprises Migun is 1.74 times less risky than Intergama. It trades about 0.07 of its potential returns per unit of risk. Intergama is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  650,100  in Intergama on September 29, 2024 and sell it today you would earn a total of  29,900  from holding Intergama or generate 4.6% return on investment over 90 days.

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

FMS Enterprises Migun  vs.  Intergama

FMS Enterprises Migun

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FMS Enterprises Migun are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FMS Enterprises sustained solid returns over the last few months and may actually be approaching a breakup point.

Intergama

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with FMS Enterprises and Intergama

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

The idea behind FMS Enterprises Migun and Intergama 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.