Correlation Between FC Investment and METALL ZUG

Can any of the company-specific risk be diversified away by investing in both FC Investment and METALL ZUG 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 FC Investment and METALL ZUG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FC Investment Trust and METALL ZUG AG, you can compare the effects of market volatilities on FC Investment and METALL ZUG 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 FC Investment with a short position of METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and METALL ZUG.

Diversification Opportunities for FC Investment and METALL ZUG

-0.87

Correlation Coefficient

FC Investment  METALL ZUG

Pay attention - limited upside

The 3 months correlation between FCIT and METALL is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG and FC 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 FC Investment Trust are associated (or correlated) with METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of FC Investment i.e., FC Investment and METALL ZUG go up and down completely randomly.

Pair Corralation between FC Investment and METALL ZUG

Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.74 times more return on investment than METALL ZUG. However, FC Investment Trust is 1.34 times less risky than METALL ZUG. It trades about 0.25 of its potential returns per unit of risk. METALL ZUG AG is currently generating about -0.09 per unit of risk. If you would invest  101,843  in FC Investment Trust on September 14, 2024 and sell it today you would earn a total of  11,357  from holding FC Investment Trust or generate 11.15% return on investment over 90 days.

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

FC Investment Trust  vs.  METALL ZUG AG

FC Investment Trust

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FC Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

METALL ZUG AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days METALL ZUG AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, METALL ZUG is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FC Investment and METALL ZUG

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

The idea behind FC Investment Trust and METALL ZUG AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.