Correlation Between Expand Energy and Frequency Therapeutics
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Frequency Therapeutics 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 Expand Energy and Frequency Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Frequency Therapeutics, you can compare the effects of market volatilities on Expand Energy and Frequency Therapeutics 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 Expand Energy with a short position of Frequency Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Frequency Therapeutics.
Diversification Opportunities for Expand Energy and Frequency Therapeutics
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Expand and Frequency is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Frequency Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Therapeutics and Expand Energy 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 Expand Energy are associated (or correlated) with Frequency Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Therapeutics has no effect on the direction of Expand Energy i.e., Expand Energy and Frequency Therapeutics go up and down completely randomly.
Pair Corralation between Expand Energy and Frequency Therapeutics
Assuming the 90 days horizon Expand Energy is expected to generate 0.44 times more return on investment than Frequency Therapeutics. However, Expand Energy is 2.28 times less risky than Frequency Therapeutics. It trades about 0.36 of its potential returns per unit of risk. Frequency Therapeutics is currently generating about -0.18 per unit of risk. If you would invest 8,963 in Expand Energy on October 22, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Frequency Therapeutics
Performance |
| Timeline |
| Expand Energy |
| Frequency Therapeutics |
Expand Energy and Frequency Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Frequency Therapeutics
The main advantage of trading using opposite Expand Energy and Frequency Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Frequency Therapeutics 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 Frequency Therapeutics will offset losses from the drop in Frequency Therapeutics' long position.| Expand Energy vs. Suburban Propane Partners | Expand Energy vs. Cheniere Energy Partners | Expand Energy vs. United Utilities Group | Expand Energy vs. Biglari Holdings |
| Frequency Therapeutics vs. Fidus Investment Corp | Frequency Therapeutics vs. Cementos Pacasmayo SAA | Frequency Therapeutics vs. McDonalds | Frequency Therapeutics vs. Summit Materials |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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