Correlation Between Staffing 360 and Futuris

Can any of the company-specific risk be diversified away by investing in both Staffing 360 and Futuris 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 Staffing 360 and Futuris into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Staffing 360 Solutions and Futuris Company, you can compare the effects of market volatilities on Staffing 360 and Futuris 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 Staffing 360 with a short position of Futuris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staffing 360 and Futuris.

Diversification Opportunities for Staffing 360 and Futuris

0.04

Correlation Coefficient

Staffing 360  Futuris

Significant diversification

The 3 months correlation between Staffing and Futuris is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Staffing 360 Solutions and Futuris Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuris Company and Staffing 360 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 Staffing 360 Solutions are associated (or correlated) with Futuris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuris Company has no effect on the direction of Staffing 360 i.e., Staffing 360 and Futuris go up and down completely randomly.

Pair Corralation between Staffing 360 and Futuris

Given the investment horizon of 90 days Staffing 360 Solutions is expected to generate 1.54 times more return on investment than Futuris. However, Staffing 360 is 1.54 times more volatile than Futuris Company. It trades about 0.08 of its potential returns per unit of risk. Futuris Company is currently generating about 0.04 per unit of risk. If you would invest  156.00  in Staffing 360 Solutions on September 13, 2024 and sell it today you would earn a total of  51.00  from holding Staffing 360 Solutions or generate 32.69% return on investment over 90 days.

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

Staffing 360 Solutions  vs.  Futuris Company

Staffing 360 Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Staffing 360 Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Staffing 360 reported solid returns over the last few months and may actually be approaching a breakup point.

Futuris Company

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Futuris Company are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Futuris unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Staffing 360 and Futuris

The main advantage of trading using opposite Staffing 360 and Futuris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staffing 360 position performs unexpectedly, Futuris 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 Futuris will offset losses from the drop in Futuris' long position.

The idea behind Staffing 360 Solutions and Futuris Company 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.