Correlation Between FC Investment and Beeks Trading

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

Diversification Opportunities for FC Investment and Beeks Trading

0.66

Correlation Coefficient

FC Investment  Beeks Trading

Poor diversification

The 3 months correlation between FCIT and Beeks is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of FC Investment i.e., FC Investment and Beeks Trading go up and down completely randomly.

Pair Corralation between FC Investment and Beeks Trading

Assuming the 90 days trading horizon FC Investment is expected to generate 7.13 times less return on investment than Beeks Trading. But when comparing it to its historical volatility, FC Investment Trust is 4.36 times less risky than Beeks Trading. It trades about 0.08 of its potential returns per unit of risk. Beeks Trading is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  10,300  in Beeks Trading on September 25, 2024 and sell it today you would earn a total of  17,300  from holding Beeks Trading or generate 167.96% return on investment over 90 days.

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

FC Investment Trust  vs.  Beeks Trading

FC Investment Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 15 (%) 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.

Beeks Trading

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Beeks Trading exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FC Investment and Beeks Trading

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

The idea behind FC Investment Trust and Beeks Trading 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.