Correlation Between ENFY and FMC
Can any of the company-specific risk be diversified away by investing in both ENFY and FMC 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 ENFY and FMC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENFY and FMC Corporation, you can compare the effects of market volatilities on ENFY and FMC 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 ENFY with a short position of FMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENFY and FMC.
Diversification Opportunities for ENFY and FMC
Modest diversification
The 3 months correlation between ENFY and FMC is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ENFY and FMC Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FMC Corporation and ENFY 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 ENFY are associated (or correlated) with FMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FMC Corporation has no effect on the direction of ENFY i.e., ENFY and FMC go up and down completely randomly.
Pair Corralation between ENFY and FMC
Given the investment horizon of 90 days ENFY is expected to under-perform the FMC. In addition to that, ENFY is 2.69 times more volatile than FMC Corporation. It trades about -0.08 of its total potential returns per unit of risk. FMC Corporation is currently generating about -0.16 per unit of volatility. If you would invest 6,345 in FMC Corporation on September 3, 2024 and sell it today you would lose (436.00) from holding FMC Corporation or give up 6.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENFY vs. FMC Corp.
Performance |
| Timeline |
| ENFY |
| FMC Corporation |
ENFY and FMC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENFY and FMC
The main advantage of trading using opposite ENFY and FMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENFY position performs unexpectedly, FMC 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 FMC will offset losses from the drop in FMC's long position.| ENFY vs. CF Industries Holdings | ENFY vs. American Vanguard | ENFY vs. FMC Corporation | ENFY vs. ICL Israel Chemicals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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