Correlation Between Foresight Autonomous and Axilion Smart

Can any of the company-specific risk be diversified away by investing in both Foresight Autonomous and Axilion Smart 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 Foresight Autonomous and Axilion Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Foresight Autonomous Holdings and Axilion Smart Mobility, you can compare the effects of market volatilities on Foresight Autonomous and Axilion Smart 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 Foresight Autonomous with a short position of Axilion Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foresight Autonomous and Axilion Smart.

Diversification Opportunities for Foresight Autonomous and Axilion Smart

0.09

Correlation Coefficient

Foresight Autonomous  Axilion Smart

Significant diversification

The 3 months correlation between Foresight and Axilion is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Foresight Autonomous Holdings and Axilion Smart Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axilion Smart Mobility and Foresight Autonomous 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 Foresight Autonomous Holdings are associated (or correlated) with Axilion Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axilion Smart Mobility has no effect on the direction of Foresight Autonomous i.e., Foresight Autonomous and Axilion Smart go up and down completely randomly.

Pair Corralation between Foresight Autonomous and Axilion Smart

Assuming the 90 days trading horizon Foresight Autonomous Holdings is expected to generate 2.06 times more return on investment than Axilion Smart. However, Foresight Autonomous is 2.06 times more volatile than Axilion Smart Mobility. It trades about 0.24 of its potential returns per unit of risk. Axilion Smart Mobility is currently generating about 0.07 per unit of risk. If you would invest  910.00  in Foresight Autonomous Holdings on September 28, 2024 and sell it today you would earn a total of  1,990  from holding Foresight Autonomous Holdings or generate 218.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.87%
Values	Daily Returns

Foresight Autonomous Holdings  vs.  Axilion Smart Mobility

Foresight Autonomous

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Foresight Autonomous Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Foresight Autonomous sustained solid returns over the last few months and may actually be approaching a breakup point.

Axilion Smart Mobility

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axilion Smart Mobility are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Axilion Smart sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foresight Autonomous and Axilion Smart

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

The idea behind Foresight Autonomous Holdings and Axilion Smart Mobility 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.