Correlation Between POET Technologies and Fobi AI

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

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

Diversification Opportunities for POET Technologies and Fobi AI

-0.46

Correlation Coefficient

POET Technologies  Fobi AI

Very good diversification

The 3 months correlation between POET and Fobi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding POET Technologies and Fobi AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fobi AI and POET 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 POET Technologies are associated (or correlated) with Fobi AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fobi AI has no effect on the direction of POET Technologies i.e., POET Technologies and Fobi AI go up and down completely randomly.

Pair Corralation between POET Technologies and Fobi AI

Assuming the 90 days horizon POET Technologies is expected to generate 1.2 times more return on investment than Fobi AI. However, POET Technologies is 1.2 times more volatile than Fobi AI. It trades about 0.05 of its potential returns per unit of risk. Fobi AI is currently generating about -0.04 per unit of risk. If you would invest  390.00  in POET Technologies on September 16, 2024 and sell it today you would earn a total of  216.00  from holding POET Technologies or generate 55.38% return on investment over 90 days.

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

POET Technologies  vs.  Fobi AI

POET Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in POET Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, POET Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with POET Technologies and Fobi AI

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

The idea behind POET Technologies and Fobi AI 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.