Correlation Between AcadeMedia and FC Investment
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and FC Investment 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 AcadeMedia and FC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and FC Investment Trust, you can compare the effects of market volatilities on AcadeMedia and FC Investment 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 AcadeMedia with a short position of FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and FC Investment.
Diversification Opportunities for AcadeMedia and FC Investment
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AcadeMedia and FCIT is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of AcadeMedia i.e., AcadeMedia and FC Investment go up and down completely randomly.
Pair Corralation between AcadeMedia and FC Investment
Assuming the 90 days trading horizon AcadeMedia AB is expected to under-perform the FC Investment. In addition to that, AcadeMedia is 1.29 times more volatile than FC Investment Trust. It trades about -0.02 of its total potential returns per unit of risk. FC Investment Trust is currently generating about 0.17 per unit of volatility. If you would invest 112,600 in FC Investment Trust on November 8, 2024 and sell it today you would earn a total of 4,200 from holding FC Investment Trust or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. FC Investment Trust
Performance |
| Timeline |
| AcadeMedia AB |
| FC Investment Trust |
AcadeMedia and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and FC Investment
The main advantage of trading using opposite AcadeMedia and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| AcadeMedia vs. Pentair PLC | AcadeMedia vs. GoldMining | AcadeMedia vs. Empire Metals Limited | AcadeMedia vs. Systemair AB |
| FC Investment vs. AMG Advanced Metallurgical | FC Investment vs. JB Hunt Transport | FC Investment vs. Eastinco Mining Exploration | FC Investment vs. British American Tobacco |
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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