Correlation Between Feat Fund and Unicorn Technologies

Can any of the company-specific risk be diversified away by investing in both Feat Fund and Unicorn Technologies 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 Feat Fund and Unicorn Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Feat Fund Investments and Unicorn Technologies , you can compare the effects of market volatilities on Feat Fund and Unicorn Technologies 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 Feat Fund with a short position of Unicorn Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feat Fund and Unicorn Technologies.

Diversification Opportunities for Feat Fund and Unicorn Technologies

0.22

Correlation Coefficient

Feat Fund  Unicorn Technologies

Modest diversification

The 3 months correlation between Feat and Unicorn is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Feat Fund Investments and Unicorn Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicorn Technologies and Feat Fund 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 Feat Fund Investments are associated (or correlated) with Unicorn Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicorn Technologies has no effect on the direction of Feat Fund i.e., Feat Fund and Unicorn Technologies go up and down completely randomly.

Pair Corralation between Feat Fund and Unicorn Technologies

Assuming the 90 days trading horizon Feat Fund Investments is expected to generate 0.41 times more return on investment than Unicorn Technologies. However, Feat Fund Investments is 2.45 times less risky than Unicorn Technologies. It trades about -0.04 of its potential returns per unit of risk. Unicorn Technologies is currently generating about -0.05 per unit of risk. If you would invest  12,920  in Feat Fund Investments on September 14, 2024 and sell it today you would lose (300.00) from holding Feat Fund Investments or give up 2.32% of portfolio value over 90 days.

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

Feat Fund Investments  vs.  Unicorn Technologies

Feat Fund Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Feat Fund Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Feat Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Unicorn Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unicorn Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Feat Fund and Unicorn Technologies

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

The idea behind Feat Fund Investments and Unicorn Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.