Correlation Between FnGuide and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both FnGuide and Lindeman Asia 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 FnGuide and Lindeman Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FnGuide and Lindeman Asia Investment, you can compare the effects of market volatilities on FnGuide and Lindeman Asia 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 FnGuide with a short position of Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of FnGuide and Lindeman Asia.
Diversification Opportunities for FnGuide and Lindeman Asia
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FnGuide and Lindeman is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding FnGuide and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment and FnGuide 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 FnGuide are associated (or correlated) with Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of FnGuide i.e., FnGuide and Lindeman Asia go up and down completely randomly.
Pair Corralation between FnGuide and Lindeman Asia
Assuming the 90 days trading horizon FnGuide is expected to generate 0.89 times more return on investment than Lindeman Asia. However, FnGuide is 1.13 times less risky than Lindeman Asia. It trades about -0.14 of its potential returns per unit of risk. Lindeman Asia Investment is currently generating about -0.24 per unit of risk. If you would invest 902,000 in FnGuide on September 12, 2024 and sell it today you would lose (97,000) from holding FnGuide or give up 10.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FnGuide vs. Lindeman Asia Investment
Performance |
| Timeline |
| FnGuide |
| Lindeman Asia Investment |
FnGuide and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FnGuide and Lindeman Asia
The main advantage of trading using opposite FnGuide and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FnGuide position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| FnGuide vs. Nh Investment And | FnGuide vs. Hanwha InvestmentSecurities Co | FnGuide vs. DSC Investment | FnGuide vs. Solution Advanced Technology |
| Lindeman Asia vs. Nh Investment And | Lindeman Asia vs. Hanwha InvestmentSecurities Co | Lindeman Asia vs. Company K Partners | Lindeman Asia vs. FnGuide |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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