Correlation Between FIT Holding and Jean
Can any of the company-specific risk be diversified away by investing in both FIT Holding and Jean 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 FIT Holding and Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT Holding Co and Jean Co, you can compare the effects of market volatilities on FIT Holding and Jean 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 FIT Holding with a short position of Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT Holding and Jean.
Diversification Opportunities for FIT Holding and Jean
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FIT and Jean is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding FIT Holding Co and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean and FIT Holding 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 FIT Holding Co are associated (or correlated) with Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of FIT Holding i.e., FIT Holding and Jean go up and down completely randomly.
Pair Corralation between FIT Holding and Jean
Assuming the 90 days trading horizon FIT Holding Co is expected to generate 1.05 times more return on investment than Jean. However, FIT Holding is 1.05 times more volatile than Jean Co. It trades about 0.08 of its potential returns per unit of risk. Jean Co is currently generating about 0.07 per unit of risk. If you would invest 2,617 in FIT Holding Co on October 13, 2024 and sell it today you would earn a total of 3,203 from holding FIT Holding Co or generate 122.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT Holding Co vs. Jean Co
Performance |
| Timeline |
| FIT Holding |
| Jean |
FIT Holding and Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT Holding and Jean
The main advantage of trading using opposite FIT Holding and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT Holding position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.| FIT Holding vs. Gigastorage Corp | FIT Holding vs. Shuttle | FIT Holding vs. Yem Chio Co | FIT Holding vs. Walton Advanced Engineering |
| Jean vs. Shuttle | Jean vs. Amtran Technology Co | Jean vs. AVerMedia Technologies | Jean vs. Gigastorage Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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