Correlation Between Fill Up and Solutions
Can any of the company-specific risk be diversified away by investing in both Fill Up and Solutions 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 Fill Up and Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fill Up Media and Solutions 30 SE, you can compare the effects of market volatilities on Fill Up and Solutions 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 Fill Up with a short position of Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fill Up and Solutions.
Diversification Opportunities for Fill Up and Solutions
Significant diversification
The 3 months correlation between Fill and Solutions is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fill Up Media and Solutions 30 SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solutions 30 SE and Fill Up 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 Fill Up Media are associated (or correlated) with Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solutions 30 SE has no effect on the direction of Fill Up i.e., Fill Up and Solutions go up and down completely randomly.
Pair Corralation between Fill Up and Solutions
Assuming the 90 days trading horizon Fill Up Media is expected to generate 0.53 times more return on investment than Solutions. However, Fill Up Media is 1.87 times less risky than Solutions. It trades about -0.04 of its potential returns per unit of risk. Solutions 30 SE is currently generating about -0.11 per unit of risk. If you would invest 782.00 in Fill Up Media on September 14, 2024 and sell it today you would lose (147.00) from holding Fill Up Media or give up 18.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fill Up Media vs. Solutions 30 SE
Performance |
| Timeline |
| Fill Up Media |
| Solutions 30 SE |
Fill Up and Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fill Up and Solutions
The main advantage of trading using opposite Fill Up and Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fill Up position performs unexpectedly, Solutions 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 Solutions will offset losses from the drop in Solutions' long position.| Fill Up vs. Bouygues SA | Fill Up vs. Legrand SA | Fill Up vs. Sodexo SA | Fill Up vs. Compagnie de Saint Gobain |
| Solutions vs. LVMH Mot Hennessy | Solutions vs. LOreal SA | Solutions vs. Hermes International SCA | Solutions vs. Manitou BF SA |
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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