Correlation Between Ferguson Plc and F3 Uranium

Can any of the company-specific risk be diversified away by investing in both Ferguson Plc and F3 Uranium 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 F3 Uranium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ferguson Plc and F3 Uranium Corp, you can compare the effects of market volatilities on Ferguson Plc and F3 Uranium 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 F3 Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferguson Plc and F3 Uranium.

Diversification Opportunities for Ferguson Plc and F3 Uranium

-0.06

Correlation Coefficient

Ferguson Plc  F3 Uranium

Good diversification

The 3 months correlation between Ferguson and FUUFF is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ferguson Plc and F3 Uranium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F3 Uranium Corp 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 F3 Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F3 Uranium Corp has no effect on the direction of Ferguson Plc i.e., Ferguson Plc and F3 Uranium go up and down completely randomly.

Pair Corralation between Ferguson Plc and F3 Uranium

Given the investment horizon of 90 days Ferguson Plc is expected to generate 0.41 times more return on investment than F3 Uranium. However, Ferguson Plc is 2.41 times less risky than F3 Uranium. It trades about 0.03 of its potential returns per unit of risk. F3 Uranium Corp is currently generating about -0.03 per unit of risk. If you would invest  16,469  in Ferguson Plc on September 23, 2024 and sell it today you would earn a total of  1,348  from holding Ferguson Plc or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Ferguson Plc  vs.  F3 Uranium Corp

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 conflicting 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.

F3 Uranium Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days F3 Uranium Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ferguson Plc and F3 Uranium

The main advantage of trading using opposite Ferguson Plc and F3 Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferguson Plc position performs unexpectedly, F3 Uranium 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 F3 Uranium will offset losses from the drop in F3 Uranium's long position.

The idea behind Ferguson Plc and F3 Uranium Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.