Correlation Between FATFISH GROUP and US Bancorp
Can any of the company-specific risk be diversified away by investing in both FATFISH GROUP and US Bancorp 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 US Bancorp 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 US Bancorp, you can compare the effects of market volatilities on FATFISH GROUP and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FATFISH GROUP and US Bancorp.
Diversification Opportunities for FATFISH GROUP and US Bancorp
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FATFISH and UB5 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding FATFISH GROUP LTD and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of FATFISH GROUP i.e., FATFISH GROUP and US Bancorp go up and down completely randomly.
Pair Corralation between FATFISH GROUP and US Bancorp
Assuming the 90 days horizon FATFISH GROUP LTD is expected to generate 5.43 times more return on investment than US Bancorp. However, FATFISH GROUP is 5.43 times more volatile than US Bancorp. It trades about 0.04 of its potential returns per unit of risk. US Bancorp is currently generating about 0.02 per unit of risk. If you would invest 0.70 in FATFISH GROUP LTD on November 19, 2024 and sell it today you would lose (0.35) from holding FATFISH GROUP LTD or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FATFISH GROUP LTD vs. US Bancorp
Performance |
| Timeline |
| FATFISH GROUP LTD |
| US Bancorp |
FATFISH GROUP and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FATFISH GROUP and US Bancorp
The main advantage of trading using opposite FATFISH GROUP and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FATFISH GROUP position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| FATFISH GROUP vs. COLUMBIA SPORTSWEAR | FATFISH GROUP vs. SmarTone Telecommunications Holdings | FATFISH GROUP vs. Singapore Telecommunications Limited | FATFISH GROUP vs. Gaztransport Technigaz SA |
| US Bancorp vs. Sims Metal Management | US Bancorp vs. COLUMBIA SPORTSWEAR | US Bancorp vs. JAPAN TOBACCO UNSPADR12 | US Bancorp vs. Jupiter Fund Management |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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