Correlation Between FinecoBank SpA and Ceres Power
Can any of the company-specific risk be diversified away by investing in both FinecoBank SpA and Ceres Power 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 Ceres Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinecoBank SpA and Ceres Power Holdings, you can compare the effects of market volatilities on FinecoBank SpA and Ceres Power 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 Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinecoBank SpA and Ceres Power.
Diversification Opportunities for FinecoBank SpA and Ceres Power
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FinecoBank and Ceres is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FinecoBank SpA and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings 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 Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of FinecoBank SpA i.e., FinecoBank SpA and Ceres Power go up and down completely randomly.
Pair Corralation between FinecoBank SpA and Ceres Power
Assuming the 90 days trading horizon FinecoBank SpA is expected to generate 0.52 times more return on investment than Ceres Power. However, FinecoBank SpA is 1.93 times less risky than Ceres Power. It trades about 0.34 of its potential returns per unit of risk. Ceres Power Holdings is currently generating about -0.18 per unit of risk. If you would invest 1,658 in FinecoBank SpA on October 25, 2024 and sell it today you would earn a total of 144.00 from holding FinecoBank SpA or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FinecoBank SpA vs. Ceres Power Holdings
Performance |
| Timeline |
| FinecoBank SpA |
| Ceres Power Holdings |
FinecoBank SpA and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FinecoBank SpA and Ceres Power
The main advantage of trading using opposite FinecoBank SpA and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinecoBank SpA position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| FinecoBank SpA vs. United Utilities Group | FinecoBank SpA vs. BW Offshore | FinecoBank SpA vs. BE Semiconductor Industries | FinecoBank SpA vs. Ecofin Global Utilities |
| Ceres Power vs. Broadridge Financial Solutions | Ceres Power vs. Broadcom | Ceres Power vs. EVS Broadcast Equipment | Ceres Power vs. Mobius Investment Trust |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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