Correlation Between FinecoBank SpA and Associated British
Can any of the company-specific risk be diversified away by investing in both FinecoBank SpA and Associated British 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 FinecoBank SpA and Associated British into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinecoBank SpA and Associated British Foods, you can compare the effects of market volatilities on FinecoBank SpA and Associated British 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 FinecoBank SpA with a short position of Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinecoBank SpA and Associated British.
Diversification Opportunities for FinecoBank SpA and Associated British
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FinecoBank and Associated is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding FinecoBank SpA and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods and FinecoBank SpA 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 FinecoBank SpA are associated (or correlated) with Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of FinecoBank SpA i.e., FinecoBank SpA and Associated British go up and down completely randomly.
Pair Corralation between FinecoBank SpA and Associated British
Assuming the 90 days trading horizon FinecoBank SpA is expected to generate 0.97 times more return on investment than Associated British. However, FinecoBank SpA is 1.03 times less risky than Associated British. It trades about 0.26 of its potential returns per unit of risk. Associated British Foods is currently generating about -0.51 per unit of risk. If you would invest 1,670 in FinecoBank SpA on October 11, 2024 and sell it today you would earn a total of 78.00 from holding FinecoBank SpA or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FinecoBank SpA vs. Associated British Foods
Performance |
| Timeline |
| FinecoBank SpA |
| Associated British Foods |
FinecoBank SpA and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FinecoBank SpA and Associated British
The main advantage of trading using opposite FinecoBank SpA and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinecoBank SpA position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| FinecoBank SpA vs. JB Hunt Transport | FinecoBank SpA vs. Teradata Corp | FinecoBank SpA vs. Automatic Data Processing | FinecoBank SpA vs. PPHE Hotel Group |
| Associated British vs. Synchrony Financial | Associated British vs. Sydbank | Associated British vs. International Biotechnology Trust | Associated British vs. FinecoBank SpA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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