Correlation Between AdvanSix and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both AdvanSix and Fortescue Metals 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 AdvanSix and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvanSix and Fortescue Metals Group, you can compare the effects of market volatilities on AdvanSix and Fortescue Metals 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 AdvanSix with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvanSix and Fortescue Metals.
Diversification Opportunities for AdvanSix and Fortescue Metals
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AdvanSix and Fortescue is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AdvanSix and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and AdvanSix 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 AdvanSix are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of AdvanSix i.e., AdvanSix and Fortescue Metals go up and down completely randomly.
Pair Corralation between AdvanSix and Fortescue Metals
Assuming the 90 days horizon AdvanSix is expected to generate 1.72 times more return on investment than Fortescue Metals. However, AdvanSix is 1.72 times more volatile than Fortescue Metals Group. It trades about 0.3 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.19 per unit of risk. If you would invest 2,660 in AdvanSix on October 24, 2024 and sell it today you would earn a total of 400.00 from holding AdvanSix or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AdvanSix vs. Fortescue Metals Group
Performance |
| Timeline |
| AdvanSix |
| Fortescue Metals |
AdvanSix and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdvanSix and Fortescue Metals
The main advantage of trading using opposite AdvanSix and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvanSix position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| AdvanSix vs. PTT GLBL CHEM NVDR | AdvanSix vs. Sumitomo Chemical | AdvanSix vs. Nissan Chemical | AdvanSix vs. Indorama Ventures PCL |
| Fortescue Metals vs. Casio Computer CoLtd | Fortescue Metals vs. China Communications Services | Fortescue Metals vs. Tradeweb Markets | Fortescue Metals vs. H2O Retailing |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |