Correlation Between FATFISH GROUP and SSE PLC
Can any of the company-specific risk be diversified away by investing in both FATFISH GROUP and SSE PLC 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 FATFISH GROUP and SSE PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FATFISH GROUP LTD and SSE PLC ADR, you can compare the effects of market volatilities on FATFISH GROUP and SSE PLC 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 FATFISH GROUP with a short position of SSE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FATFISH GROUP and SSE PLC.
Diversification Opportunities for FATFISH GROUP and SSE PLC
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FATFISH and SSE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding FATFISH GROUP LTD and SSE PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSE PLC ADR and FATFISH GROUP 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 FATFISH GROUP LTD are associated (or correlated) with SSE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSE PLC ADR has no effect on the direction of FATFISH GROUP i.e., FATFISH GROUP and SSE PLC go up and down completely randomly.
Pair Corralation between FATFISH GROUP and SSE PLC
Assuming the 90 days horizon FATFISH GROUP LTD is expected to generate 7.94 times more return on investment than SSE PLC. However, FATFISH GROUP is 7.94 times more volatile than SSE PLC ADR. It trades about 0.1 of its potential returns per unit of risk. SSE PLC ADR is currently generating about -0.13 per unit of risk. If you would invest 0.40 in FATFISH GROUP LTD on September 12, 2024 and sell it today you would earn a total of 0.15 from holding FATFISH GROUP LTD or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FATFISH GROUP LTD vs. SSE PLC ADR
Performance |
| Timeline |
| FATFISH GROUP LTD |
| SSE PLC ADR |
FATFISH GROUP and SSE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FATFISH GROUP and SSE PLC
The main advantage of trading using opposite FATFISH GROUP and SSE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FATFISH GROUP position performs unexpectedly, SSE PLC 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 SSE PLC will offset losses from the drop in SSE PLC's long position.| FATFISH GROUP vs. Strategic Education | FATFISH GROUP vs. PKSHA TECHNOLOGY INC | FATFISH GROUP vs. Grand Canyon Education | FATFISH GROUP vs. Sunny Optical Technology |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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