Correlation Between Ferguson Plc and Grayscale Filecoin

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

By analyzing existing cross correlation between Ferguson Plc and Grayscale Filecoin Trust, you can compare the effects of market volatilities on Ferguson Plc and Grayscale Filecoin 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 Grayscale Filecoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferguson Plc and Grayscale Filecoin.

Diversification Opportunities for Ferguson Plc and Grayscale Filecoin

-0.01

Correlation Coefficient

Ferguson Plc  Grayscale Filecoin

Good diversification

The 3 months correlation between Ferguson and Grayscale is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ferguson Plc and Grayscale Filecoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Filecoin Trust 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 Grayscale Filecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Filecoin Trust has no effect on the direction of Ferguson Plc i.e., Ferguson Plc and Grayscale Filecoin go up and down completely randomly.

Pair Corralation between Ferguson Plc and Grayscale Filecoin

Given the investment horizon of 90 days Ferguson Plc is expected to generate 0.28 times more return on investment than Grayscale Filecoin. However, Ferguson Plc is 3.51 times less risky than Grayscale Filecoin. It trades about -0.32 of its potential returns per unit of risk. Grayscale Filecoin Trust is currently generating about -0.1 per unit of risk. If you would invest  21,308  in Ferguson Plc on October 1, 2024 and sell it today you would lose (3,794) from holding Ferguson Plc or give up 17.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Ferguson Plc  vs.  Grayscale Filecoin Trust

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.

Grayscale Filecoin Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Filecoin Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Grayscale Filecoin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ferguson Plc and Grayscale Filecoin

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

The idea behind Ferguson Plc and Grayscale Filecoin Trust 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.