Correlation Between Ferguson Plc and Aeva Technologies,

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

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

Diversification Opportunities for Ferguson Plc and Aeva Technologies,

0.33

Correlation Coefficient

Ferguson Plc  Aeva Technologies,

Weak diversification

The 3 months correlation between Ferguson and Aeva is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ferguson Plc and Aeva Technologies, WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies, and Ferguson Plc 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 Ferguson Plc are associated (or correlated) with Aeva Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeva Technologies, has no effect on the direction of Ferguson Plc i.e., Ferguson Plc and Aeva Technologies, go up and down completely randomly.

Pair Corralation between Ferguson Plc and Aeva Technologies,

Given the investment horizon of 90 days Ferguson Plc is expected to under-perform the Aeva Technologies,. But the stock apears to be less risky and, when comparing its historical volatility, Ferguson Plc is 6.09 times less risky than Aeva Technologies,. The stock trades about -0.32 of its potential returns per unit of risk. The Aeva Technologies, WT is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  6.30  in Aeva Technologies, WT on September 25, 2024 and sell it today you would lose (0.05) from holding Aeva Technologies, WT or give up 0.79% of portfolio value over 90 days.

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

Ferguson Plc  vs.  Aeva Technologies, WT

Ferguson Plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aeva Technologies,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies, WT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Aeva Technologies, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ferguson Plc and Aeva Technologies,

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

The idea behind Ferguson Plc and Aeva Technologies, WT 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.