Correlation Between Nova Wellness and FGV Holdings
Can any of the company-specific risk be diversified away by investing in both Nova Wellness and FGV Holdings 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 Nova Wellness and FGV Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Wellness Group and FGV Holdings Bhd, you can compare the effects of market volatilities on Nova Wellness and FGV Holdings 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 Nova Wellness with a short position of FGV Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Wellness and FGV Holdings.
Diversification Opportunities for Nova Wellness and FGV Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nova and FGV is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nova Wellness Group and FGV Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGV Holdings Bhd and Nova Wellness 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 Nova Wellness Group are associated (or correlated) with FGV Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGV Holdings Bhd has no effect on the direction of Nova Wellness i.e., Nova Wellness and FGV Holdings go up and down completely randomly.
Pair Corralation between Nova Wellness and FGV Holdings
Assuming the 90 days trading horizon Nova Wellness is expected to generate 9.35 times less return on investment than FGV Holdings. In addition to that, Nova Wellness is 1.35 times more volatile than FGV Holdings Bhd. It trades about 0.01 of its total potential returns per unit of risk. FGV Holdings Bhd is currently generating about 0.13 per unit of volatility. If you would invest 109.00 in FGV Holdings Bhd on August 30, 2024 and sell it today you would earn a total of 5.00 from holding FGV Holdings Bhd or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nova Wellness Group vs. FGV Holdings Bhd
Performance |
| Timeline |
| Nova Wellness Group |
| FGV Holdings Bhd |
Nova Wellness and FGV Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Wellness and FGV Holdings
The main advantage of trading using opposite Nova Wellness and FGV Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Wellness position performs unexpectedly, FGV Holdings 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 FGV Holdings will offset losses from the drop in FGV Holdings' long position.| Nova Wellness vs. ES Ceramics Technology | Nova Wellness vs. IHH Healthcare Bhd | Nova Wellness vs. Sports Toto Berhad | Nova Wellness vs. Senheng New Retail |
| FGV Holdings vs. Impiana Hotels Bhd | FGV Holdings vs. JF Technology BHD | FGV Holdings vs. Lotte Chemical Titan | FGV Holdings vs. Eonmetall Group Bhd |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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