Correlation Between Focus Home and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Focus Home and AIR PRODCHEMICALS 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 Focus Home and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and AIR PRODCHEMICALS, you can compare the effects of market volatilities on Focus Home and AIR PRODCHEMICALS 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 Focus Home with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and AIR PRODCHEMICALS.
Diversification Opportunities for Focus Home and AIR PRODCHEMICALS
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and AIR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and Focus Home 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 Focus Home Interactive are associated (or correlated) with AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Focus Home i.e., Focus Home and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Focus Home and AIR PRODCHEMICALS
Assuming the 90 days horizon Focus Home Interactive is expected to generate 5.93 times more return on investment than AIR PRODCHEMICALS. However, Focus Home is 5.93 times more volatile than AIR PRODCHEMICALS. It trades about 0.02 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about -0.52 per unit of risk. If you would invest 2,085 in Focus Home Interactive on October 13, 2024 and sell it today you would earn a total of 5.00 from holding Focus Home Interactive or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Focus Home Interactive |
| AIR PRODCHEMICALS |
Focus Home and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and AIR PRODCHEMICALS
The main advantage of trading using opposite Focus Home and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Focus Home vs. TYSON FOODS A | Focus Home vs. MagnaChip Semiconductor Corp | Focus Home vs. BE Semiconductor Industries | Focus Home vs. Tyson Foods |
| AIR PRODCHEMICALS vs. Focus Home Interactive | AIR PRODCHEMICALS vs. INVITATION HOMES DL | AIR PRODCHEMICALS vs. WESANA HEALTH HOLD | AIR PRODCHEMICALS vs. ADDUS HOMECARE |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |