Correlation Between Dug Technology and Finexia Financial
Can any of the company-specific risk be diversified away by investing in both Dug Technology and Finexia Financial 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 Dug Technology and Finexia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dug Technology and Finexia Financial Group, you can compare the effects of market volatilities on Dug Technology and Finexia Financial 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 Dug Technology with a short position of Finexia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dug Technology and Finexia Financial.
Diversification Opportunities for Dug Technology and Finexia Financial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dug and Finexia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dug Technology and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial and Dug Technology 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 Dug Technology are associated (or correlated) with Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Dug Technology i.e., Dug Technology and Finexia Financial go up and down completely randomly.
Pair Corralation between Dug Technology and Finexia Financial
Assuming the 90 days trading horizon Dug Technology is expected to generate 0.64 times more return on investment than Finexia Financial. However, Dug Technology is 1.56 times less risky than Finexia Financial. It trades about 0.09 of its potential returns per unit of risk. Finexia Financial Group is currently generating about 0.03 per unit of risk. If you would invest 50.00 in Dug Technology on August 27, 2024 and sell it today you would earn a total of 101.00 from holding Dug Technology or generate 202.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dug Technology vs. Finexia Financial Group
Performance |
| Timeline |
| Dug Technology |
| Finexia Financial |
Dug Technology and Finexia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dug Technology and Finexia Financial
The main advantage of trading using opposite Dug Technology and Finexia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dug Technology position performs unexpectedly, Finexia Financial 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 Finexia Financial will offset losses from the drop in Finexia Financial's long position.| Dug Technology vs. Westpac Banking | Dug Technology vs. Ecofibre | Dug Technology vs. iShares Global Healthcare | Dug Technology vs. Adriatic Metals Plc |
| Finexia Financial vs. Renascor Resources | Finexia Financial vs. Venus Metals | Finexia Financial vs. Havilah Resources | Finexia Financial vs. Asara Resources |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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