Correlation Between Fattal 1998 and Capital Point

Can any of the company-specific risk be diversified away by investing in both Fattal 1998 and Capital Point 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 Fattal 1998 and Capital Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fattal 1998 Holdings and Capital Point, you can compare the effects of market volatilities on Fattal 1998 and Capital Point 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 Fattal 1998 with a short position of Capital Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fattal 1998 and Capital Point.

Diversification Opportunities for Fattal 1998 and Capital Point

0.49

Correlation Coefficient

Fattal 1998  Capital Point

Very weak diversification

The 3 months correlation between Fattal and Capital is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fattal 1998 Holdings and Capital Point in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Point and Fattal 1998 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 Fattal 1998 Holdings are associated (or correlated) with Capital Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Point has no effect on the direction of Fattal 1998 i.e., Fattal 1998 and Capital Point go up and down completely randomly.

Pair Corralation between Fattal 1998 and Capital Point

Assuming the 90 days trading horizon Fattal 1998 Holdings is expected to generate 1.15 times more return on investment than Capital Point. However, Fattal 1998 is 1.15 times more volatile than Capital Point. It trades about 0.3 of its potential returns per unit of risk. Capital Point is currently generating about 0.25 per unit of risk. If you would invest  4,019,000  in Fattal 1998 Holdings on September 24, 2024 and sell it today you would earn a total of  1,405,000  from holding Fattal 1998 Holdings or generate 34.96% return on investment over 90 days.

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

Fattal 1998 Holdings  vs.  Capital Point

Fattal 1998 Holdings

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fattal 1998 Holdings are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fattal 1998 sustained solid returns over the last few months and may actually be approaching a breakup point.

Capital Point

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Point are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Capital Point sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fattal 1998 and Capital Point

The main advantage of trading using opposite Fattal 1998 and Capital Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fattal 1998 position performs unexpectedly, Capital Point 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 Capital Point will offset losses from the drop in Capital Point's long position.

The idea behind Fattal 1998 Holdings and Capital Point 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.