Correlation Between Cairn Homes and FD Technologies
Can any of the company-specific risk be diversified away by investing in both Cairn Homes and FD Technologies 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 Cairn Homes and FD Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and FD Technologies PLC, you can compare the effects of market volatilities on Cairn Homes and FD Technologies 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 Cairn Homes with a short position of FD Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and FD Technologies.
Diversification Opportunities for Cairn Homes and FD Technologies
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cairn and GYQ is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and FD Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FD Technologies PLC and Cairn Homes 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 Cairn Homes PLC are associated (or correlated) with FD Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FD Technologies PLC has no effect on the direction of Cairn Homes i.e., Cairn Homes and FD Technologies go up and down completely randomly.
Pair Corralation between Cairn Homes and FD Technologies
If you would invest 229.00 in Cairn Homes PLC on November 9, 2024 and sell it today you would earn a total of 1.00 from holding Cairn Homes PLC or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. FD Technologies PLC
Performance |
| Timeline |
| Cairn Homes PLC |
| FD Technologies PLC |
Cairn Homes and FD Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and FD Technologies
The main advantage of trading using opposite Cairn Homes and FD Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes position performs unexpectedly, FD Technologies 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 FD Technologies will offset losses from the drop in FD Technologies' long position.| Cairn Homes vs. Glenveagh Properties PLC | Cairn Homes vs. AIB Group PLC | Cairn Homes vs. Dalata Hotel Group | Cairn Homes vs. Bank of Ireland |
| FD Technologies vs. Bank of Ireland | FD Technologies vs. Great Western Mining | FD Technologies vs. Dalata Hotel Group | FD Technologies vs. Datalex |
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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