Correlation Between CAP LEASE and Futura Medical
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Futura Medical 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 CAP LEASE and Futura Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Futura Medical, you can compare the effects of market volatilities on CAP LEASE and Futura Medical 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 CAP LEASE with a short position of Futura Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Futura Medical.
Diversification Opportunities for CAP LEASE and Futura Medical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CAP and Futura is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of CAP LEASE i.e., CAP LEASE and Futura Medical go up and down completely randomly.
Pair Corralation between CAP LEASE and Futura Medical
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Futura Medical. In addition to that, CAP LEASE is 1.44 times more volatile than Futura Medical. It trades about -0.17 of its total potential returns per unit of risk. Futura Medical is currently generating about -0.16 per unit of volatility. If you would invest 3,550 in Futura Medical on August 30, 2024 and sell it today you would lose (220.00) from holding Futura Medical or give up 6.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Futura Medical
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Futura Medical |
CAP LEASE and Futura Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Futura Medical
The main advantage of trading using opposite CAP LEASE and Futura Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Futura Medical 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 Futura Medical will offset losses from the drop in Futura Medical's long position.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Centamin PLC | CAP LEASE vs. Atalaya Mining |
| Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Hyundai Motor | Futura Medical vs. Toyota Motor Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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