Correlation Between FMC Corp and Sligro Food
Can any of the company-specific risk be diversified away by investing in both FMC Corp and Sligro Food 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 FMC Corp and Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FMC Corp and Sligro Food Group, you can compare the effects of market volatilities on FMC Corp and Sligro Food 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 FMC Corp with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC Corp and Sligro Food.
Diversification Opportunities for FMC Corp and Sligro Food
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FMC and Sligro is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and FMC Corp 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 FMC Corp are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of FMC Corp i.e., FMC Corp and Sligro Food go up and down completely randomly.
Pair Corralation between FMC Corp and Sligro Food
Assuming the 90 days trading horizon FMC Corp is expected to generate 2.43 times more return on investment than Sligro Food. However, FMC Corp is 2.43 times more volatile than Sligro Food Group. It trades about 0.01 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.24 per unit of risk. If you would invest 5,896 in FMC Corp on September 12, 2024 and sell it today you would earn a total of 6.00 from holding FMC Corp or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FMC Corp vs. Sligro Food Group
Performance |
| Timeline |
| FMC Corp |
| Sligro Food Group |
FMC Corp and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FMC Corp and Sligro Food
The main advantage of trading using opposite FMC Corp and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMC Corp position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| FMC Corp vs. Liontrust Asset Management | FMC Corp vs. Bisichi Mining PLC | FMC Corp vs. SMA Solar Technology | FMC Corp vs. Spotify Technology SA |
| Sligro Food vs. Primary Health Properties | Sligro Food vs. Deltex Medical Group | Sligro Food vs. CompuGroup Medical AG | Sligro Food vs. Abingdon Health Plc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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