Correlation Between Fobi AI and Skkynet Cloud

Can any of the company-specific risk be diversified away by investing in both Fobi AI and Skkynet Cloud 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 Fobi AI and Skkynet Cloud into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fobi AI and Skkynet Cloud Systems, you can compare the effects of market volatilities on Fobi AI and Skkynet Cloud 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 Fobi AI with a short position of Skkynet Cloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fobi AI and Skkynet Cloud.

Diversification Opportunities for Fobi AI and Skkynet Cloud

-0.78

Correlation Coefficient

Fobi AI  Skkynet Cloud

Pay attention - limited upside

The 3 months correlation between Fobi and Skkynet is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fobi AI and Skkynet Cloud Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skkynet Cloud Systems and Fobi AI 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 Fobi AI are associated (or correlated) with Skkynet Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skkynet Cloud Systems has no effect on the direction of Fobi AI i.e., Fobi AI and Skkynet Cloud go up and down completely randomly.

Pair Corralation between Fobi AI and Skkynet Cloud

Assuming the 90 days horizon Fobi AI is expected to generate 26.75 times less return on investment than Skkynet Cloud. In addition to that, Fobi AI is 1.31 times more volatile than Skkynet Cloud Systems. It trades about 0.0 of its total potential returns per unit of risk. Skkynet Cloud Systems is currently generating about 0.1 per unit of volatility. If you would invest  51.00  in Skkynet Cloud Systems on September 22, 2024 and sell it today you would earn a total of  19.00  from holding Skkynet Cloud Systems or generate 37.25% return on investment over 90 days.

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

Fobi AI  vs.  Skkynet Cloud Systems

Fobi AI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fobi AI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Fobi AI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Skkynet Cloud Systems

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Skkynet Cloud Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward-looking signals, Skkynet Cloud showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fobi AI and Skkynet Cloud

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

The idea behind Fobi AI and Skkynet Cloud Systems 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.