Correlation Between Bankers Investment and FC Investment
Can any of the company-specific risk be diversified away by investing in both Bankers Investment and FC Investment 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 Bankers Investment and FC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and FC Investment Trust, you can compare the effects of market volatilities on Bankers Investment and FC Investment 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 Bankers Investment with a short position of FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and FC Investment.
Diversification Opportunities for Bankers Investment and FC Investment
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bankers and FCIT is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust and Bankers 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 Bankers Investment Trust are associated (or correlated) with FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Bankers Investment i.e., Bankers Investment and FC Investment go up and down completely randomly.
Pair Corralation between Bankers Investment and FC Investment
Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 1.13 times more return on investment than FC Investment. However, Bankers Investment is 1.13 times more volatile than FC Investment Trust. It trades about 0.34 of its potential returns per unit of risk. FC Investment Trust is currently generating about 0.27 per unit of risk. If you would invest 11,676 in Bankers Investment Trust on November 5, 2024 and sell it today you would earn a total of 864.00 from holding Bankers Investment Trust or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. FC Investment Trust
Performance |
| Timeline |
| Bankers Investment Trust |
| FC Investment Trust |
Bankers Investment and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and FC Investment
The main advantage of trading using opposite Bankers Investment and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| Bankers Investment vs. Inspiration Healthcare Group | Bankers Investment vs. MTI Wireless Edge | Bankers Investment vs. Verizon Communications | Bankers Investment vs. Planet Fitness Cl |
| FC Investment vs. JD Sports Fashion | FC Investment vs. Cairo Communication SpA | FC Investment vs. Mobius Investment Trust | FC Investment vs. Lowland Investment Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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