Correlation Between Indo Global and Fonu2

Can any of the company-specific risk be diversified away by investing in both Indo Global and Fonu2 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 Indo Global and Fonu2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indo Global Exchange and Fonu2 Inc, you can compare the effects of market volatilities on Indo Global and Fonu2 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 Indo Global with a short position of Fonu2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Global and Fonu2.

Diversification Opportunities for Indo Global and Fonu2

0.4

Correlation Coefficient

Indo Global  Fonu2

Very weak diversification

The 3 months correlation between Indo and Fonu2 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Indo Global Exchange and Fonu2 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonu2 Inc and Indo Global 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 Indo Global Exchange are associated (or correlated) with Fonu2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonu2 Inc has no effect on the direction of Indo Global i.e., Indo Global and Fonu2 go up and down completely randomly.

Pair Corralation between Indo Global and Fonu2

Given the investment horizon of 90 days Indo Global is expected to generate 25.12 times less return on investment than Fonu2. But when comparing it to its historical volatility, Indo Global Exchange is 24.59 times less risky than Fonu2. It trades about 0.16 of its potential returns per unit of risk. Fonu2 Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Fonu2 Inc on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Fonu2 Inc or generate 0.0% return on investment over 90 days.

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

Indo Global Exchange  vs.  Fonu2 Inc

Indo Global Exchange

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Indo Global Exchange are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Indo Global showed solid returns over the last few months and may actually be approaching a breakup point.

Fonu2 Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fonu2 Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Fonu2 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Indo Global and Fonu2

The main advantage of trading using opposite Indo Global and Fonu2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Global position performs unexpectedly, Fonu2 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 Fonu2 will offset losses from the drop in Fonu2's long position.

The idea behind Indo Global Exchange and Fonu2 Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.