Correlation Between Amogreentech and FNSTech
Can any of the company-specific risk be diversified away by investing in both Amogreentech and FNSTech 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 Amogreentech and FNSTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amogreentech Co and FNSTech Co, you can compare the effects of market volatilities on Amogreentech and FNSTech 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 Amogreentech with a short position of FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amogreentech and FNSTech.
Diversification Opportunities for Amogreentech and FNSTech
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amogreentech and FNSTech is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amogreentech Co and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech and Amogreentech 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 Amogreentech Co are associated (or correlated) with FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of Amogreentech i.e., Amogreentech and FNSTech go up and down completely randomly.
Pair Corralation between Amogreentech and FNSTech
Assuming the 90 days trading horizon Amogreentech Co is expected to under-perform the FNSTech. But the stock apears to be less risky and, when comparing its historical volatility, Amogreentech Co is 1.33 times less risky than FNSTech. The stock trades about -0.08 of its potential returns per unit of risk. The FNSTech Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 935,000 in FNSTech Co on August 28, 2024 and sell it today you would lose (20,000) from holding FNSTech Co or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.79% |
| Values | Daily Returns |
Amogreentech Co vs. FNSTech Co
Performance |
| Timeline |
| Amogreentech |
| FNSTech |
Amogreentech and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amogreentech and FNSTech
The main advantage of trading using opposite Amogreentech and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amogreentech position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.The idea behind Amogreentech Co and FNSTech Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FNSTech vs. POSCO M TECH Co | FNSTech vs. PH Tech Co | FNSTech vs. CU Tech Corp | FNSTech vs. Lotte Data Communication |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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