Correlation Between Fair Oaks and FC Investment
Can any of the company-specific risk be diversified away by investing in both Fair Oaks and FC Investment 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 Fair Oaks and FC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Oaks Income and FC Investment Trust, you can compare the effects of market volatilities on Fair Oaks and FC Investment 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 Fair Oaks with a short position of FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and FC Investment.
Diversification Opportunities for Fair Oaks and FC Investment
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fair and FCIT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fair Oaks Income and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust and Fair Oaks 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 Fair Oaks Income are associated (or correlated) with FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Fair Oaks i.e., Fair Oaks and FC Investment go up and down completely randomly.
Pair Corralation between Fair Oaks and FC Investment
Assuming the 90 days trading horizon Fair Oaks is expected to generate 1.44 times less return on investment than FC Investment. In addition to that, Fair Oaks is 1.65 times more volatile than FC Investment Trust. It trades about 0.14 of its total potential returns per unit of risk. FC Investment Trust is currently generating about 0.34 per unit of volatility. If you would invest 105,600 in FC Investment Trust on August 28, 2024 and sell it today you would earn a total of 6,400 from holding FC Investment Trust or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fair Oaks Income vs. FC Investment Trust
Performance |
| Timeline |
| Fair Oaks Income |
| FC Investment Trust |
Fair Oaks and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Oaks and FC Investment
The main advantage of trading using opposite Fair Oaks and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Oaks position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| Fair Oaks vs. Deltex Medical Group | Fair Oaks vs. Celebrus Technologies plc | Fair Oaks vs. Thor Mining PLC | Fair Oaks vs. GoldMining |
| FC Investment vs. Catalyst Media Group | FC Investment vs. Oncimmune Holdings plc | FC Investment vs. Invesco Health Care | FC Investment vs. Coor Service Management |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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