Correlation Between Investment and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both Investment and FIT INVEST 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 Investment and FIT INVEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment and Industrial and FIT INVEST JSC, you can compare the effects of market volatilities on Investment and FIT INVEST 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 Investment with a short position of FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and FIT INVEST.
Diversification Opportunities for Investment and FIT INVEST
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Investment and FIT is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Investment and Industrial and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC and Investment 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 Investment and Industrial are associated (or correlated) with FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of Investment i.e., Investment and FIT INVEST go up and down completely randomly.
Pair Corralation between Investment and FIT INVEST
Assuming the 90 days trading horizon Investment and Industrial is expected to under-perform the FIT INVEST. But the stock apears to be less risky and, when comparing its historical volatility, Investment and Industrial is 1.46 times less risky than FIT INVEST. The stock trades about -0.01 of its potential returns per unit of risk. The FIT INVEST JSC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 429,000 in FIT INVEST JSC on August 29, 2024 and sell it today you would lose (11,000) from holding FIT INVEST JSC or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment and Industrial vs. FIT INVEST JSC
Performance |
| Timeline |
| Investment and Industrial |
| FIT INVEST JSC |
Investment and FIT INVEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and FIT INVEST
The main advantage of trading using opposite Investment and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.| Investment vs. FIT INVEST JSC | Investment vs. Damsan JSC | Investment vs. An Phat Plastic | Investment vs. APG Securities Joint |
| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. APG Securities Joint | FIT INVEST vs. Binhthuan Agriculture Services |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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