Correlation Between EBay and Fnac Darty
Can any of the company-specific risk be diversified away by investing in both EBay and Fnac Darty 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 EBay and Fnac Darty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eBay Inc and Fnac Darty SA, you can compare the effects of market volatilities on EBay and Fnac Darty 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 EBay with a short position of Fnac Darty. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBay and Fnac Darty.
Diversification Opportunities for EBay and Fnac Darty
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between EBay and Fnac is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding eBay Inc and Fnac Darty SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fnac Darty SA and EBay 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 eBay Inc are associated (or correlated) with Fnac Darty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fnac Darty SA has no effect on the direction of EBay i.e., EBay and Fnac Darty go up and down completely randomly.
Pair Corralation between EBay and Fnac Darty
Assuming the 90 days horizon eBay Inc is expected to generate 0.63 times more return on investment than Fnac Darty. However, eBay Inc is 1.6 times less risky than Fnac Darty. It trades about 0.07 of its potential returns per unit of risk. Fnac Darty SA is currently generating about -0.01 per unit of risk. If you would invest 4,215 in eBay Inc on September 12, 2024 and sell it today you would earn a total of 2,007 from holding eBay Inc or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
eBay Inc vs. Fnac Darty SA
Performance |
| Timeline |
| eBay Inc |
| Fnac Darty SA |
EBay and Fnac Darty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBay and Fnac Darty
The main advantage of trading using opposite EBay and Fnac Darty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBay position performs unexpectedly, Fnac Darty 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 Fnac Darty will offset losses from the drop in Fnac Darty's long position.| EBay vs. Avanos Medical | EBay vs. IMAGIN MEDICAL INC | EBay vs. ADRIATIC METALS LS 013355 | EBay vs. SERI INDUSTRIAL EO |
| Fnac Darty vs. Ribbon Communications | Fnac Darty vs. CDL INVESTMENT | Fnac Darty vs. Entravision Communications | Fnac Darty vs. REGAL ASIAN INVESTMENTS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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