Correlation Between Acrow and FSA
Can any of the company-specific risk be diversified away by investing in both Acrow and FSA 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 Acrow and FSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acrow Limited and FSA Group, you can compare the effects of market volatilities on Acrow and FSA 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 Acrow with a short position of FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acrow and FSA.
Diversification Opportunities for Acrow and FSA
Very good diversification
The 3 months correlation between Acrow and FSA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Acrow Limited and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group and Acrow 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 Acrow Limited are associated (or correlated) with FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Acrow i.e., Acrow and FSA go up and down completely randomly.
Pair Corralation between Acrow and FSA
Assuming the 90 days trading horizon Acrow Limited is expected to generate 1.34 times more return on investment than FSA. However, Acrow is 1.34 times more volatile than FSA Group. It trades about 0.03 of its potential returns per unit of risk. FSA Group is currently generating about -0.02 per unit of risk. If you would invest 92.00 in Acrow Limited on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Acrow Limited or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Acrow Limited vs. FSA Group
Performance |
| Timeline |
| Acrow Limited |
| FSA Group |
Acrow and FSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acrow and FSA
The main advantage of trading using opposite Acrow and FSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acrow position performs unexpectedly, FSA 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 FSA will offset losses from the drop in FSA's long position.| Acrow vs. Iron Road | Acrow vs. Duxton Broadacre Farms | Acrow vs. Kip McGrath Education | Acrow vs. Auctus Alternative Investments |
| FSA vs. Flagship Investments | FSA vs. Platinum Asia Investments | FSA vs. Hotel Property Investments | FSA vs. Queste Communications |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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