Correlation Between FD Technologies and KLP Aksje

Can any of the company-specific risk be diversified away by investing in both FD Technologies and KLP Aksje 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 FD Technologies and KLP Aksje into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FD Technologies PLC and KLP Aksje Fremvoksende, you can compare the effects of market volatilities on FD Technologies and KLP Aksje 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 FD Technologies with a short position of KLP Aksje. Check out your portfolio center. Please also check ongoing floating volatility patterns of FD Technologies and KLP Aksje.

Diversification Opportunities for FD Technologies and KLP Aksje

0.11

Correlation Coefficient

FD Technologies  KLP Aksje

Average diversification

The 3 months correlation between GYQ and KLP is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FD Technologies PLC and KLP Aksje Fremvoksende in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLP Aksje Fremvoksende and FD Technologies 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 FD Technologies PLC are associated (or correlated) with KLP Aksje. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLP Aksje Fremvoksende has no effect on the direction of FD Technologies i.e., FD Technologies and KLP Aksje go up and down completely randomly.

Pair Corralation between FD Technologies and KLP Aksje

Assuming the 90 days trading horizon FD Technologies PLC is expected to generate 2.21 times more return on investment than KLP Aksje. However, FD Technologies is 2.21 times more volatile than KLP Aksje Fremvoksende. It trades about 0.15 of its potential returns per unit of risk. KLP Aksje Fremvoksende is currently generating about 0.12 per unit of risk. If you would invest  1,830  in FD Technologies PLC on September 24, 2024 and sell it today you would earn a total of  290.00  from holding FD Technologies PLC or generate 15.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

FD Technologies PLC  vs.  KLP Aksje Fremvoksende

FD Technologies PLC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FD Technologies PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, FD Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

KLP Aksje Fremvoksende

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KLP Aksje Fremvoksende are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, KLP Aksje is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FD Technologies and KLP Aksje

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

The idea behind FD Technologies PLC and KLP Aksje Fremvoksende 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.