Correlation Between Birkenstock Holding and First Trust
Can any of the company-specific risk be diversified away by investing in both Birkenstock Holding and First Trust 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 Birkenstock Holding and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birkenstock Holding plc and First Trust Brazil, you can compare the effects of market volatilities on Birkenstock Holding and First Trust 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 Birkenstock Holding with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birkenstock Holding and First Trust.
Diversification Opportunities for Birkenstock Holding and First Trust
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Birkenstock and First is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Birkenstock Holding plc and First Trust Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Brazil and Birkenstock 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 Birkenstock Holding plc are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Brazil has no effect on the direction of Birkenstock Holding i.e., Birkenstock Holding and First Trust go up and down completely randomly.
Pair Corralation between Birkenstock Holding and First Trust
Given the investment horizon of 90 days Birkenstock Holding plc is expected to under-perform the First Trust. In addition to that, Birkenstock Holding is 1.03 times more volatile than First Trust Brazil. It trades about -0.58 of its total potential returns per unit of risk. First Trust Brazil is currently generating about -0.01 per unit of volatility. If you would invest 992.00 in First Trust Brazil on December 8, 2024 and sell it today you would lose (6.00) from holding First Trust Brazil or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Birkenstock Holding plc vs. First Trust Brazil
Performance |
| Timeline |
| Birkenstock Holding plc |
| First Trust Brazil |
Birkenstock Holding and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birkenstock Holding and First Trust
The main advantage of trading using opposite Birkenstock Holding and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birkenstock Holding position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Birkenstock Holding vs. National Beverage Corp | ||
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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