Correlation Between Stic Investments and FNSTech
Can any of the company-specific risk be diversified away by investing in both Stic Investments and FNSTech 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 Stic Investments and FNSTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and FNSTech Co, you can compare the effects of market volatilities on Stic Investments and FNSTech 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 Stic Investments with a short position of FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and FNSTech.
Diversification Opportunities for Stic Investments and FNSTech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stic and FNSTech is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech and Stic Investments 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 Stic Investments are associated (or correlated) with FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of Stic Investments i.e., Stic Investments and FNSTech go up and down completely randomly.
Pair Corralation between Stic Investments and FNSTech
Assuming the 90 days trading horizon Stic Investments is expected to generate 0.49 times more return on investment than FNSTech. However, Stic Investments is 2.05 times less risky than FNSTech. It trades about 0.01 of its potential returns per unit of risk. FNSTech Co is currently generating about -0.06 per unit of risk. If you would invest 808,000 in Stic Investments on August 31, 2024 and sell it today you would lose (1,000.00) from holding Stic Investments or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. FNSTech Co
Performance |
| Timeline |
| Stic Investments |
| FNSTech |
Stic Investments and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and FNSTech
The main advantage of trading using opposite Stic Investments and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.| Stic Investments vs. Dongsin Engineering Construction | Stic Investments vs. Doosan Fuel Cell | Stic Investments vs. Daishin Balance 1 | Stic Investments vs. Total Soft Bank |
| FNSTech vs. Samsung Electronics Co | FNSTech vs. Samsung Electronics Co | FNSTech vs. LG Energy Solution | FNSTech vs. SK Hynix |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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