Correlation Between FARO Technologies and Volcan
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By analyzing existing cross correlation between FARO Technologies and Volcan Compania Minera, you can compare the effects of market volatilities on FARO Technologies and Volcan 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 FARO Technologies with a short position of Volcan. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and Volcan.
Diversification Opportunities for FARO Technologies and Volcan
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between FARO and Volcan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies and Volcan Compania Minera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcan Compania Minera and FARO Technologies 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 FARO Technologies are associated (or correlated) with Volcan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcan Compania Minera has no effect on the direction of FARO Technologies i.e., FARO Technologies and Volcan go up and down completely randomly.
Pair Corralation between FARO Technologies and Volcan
Given the investment horizon of 90 days FARO Technologies is expected to generate 0.39 times more return on investment than Volcan. However, FARO Technologies is 2.55 times less risky than Volcan. It trades about 0.19 of its potential returns per unit of risk. Volcan Compania Minera is currently generating about -0.43 per unit of risk. If you would invest 2,568 in FARO Technologies on September 15, 2024 and sell it today you would earn a total of 167.00 from holding FARO Technologies or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.1% |
| Values | Daily Returns |
FARO Technologies vs. Volcan Compania Minera
Performance |
| Timeline |
| FARO Technologies |
| Volcan Compania Minera |
FARO Technologies and Volcan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARO Technologies and Volcan
The main advantage of trading using opposite FARO Technologies and Volcan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARO Technologies position performs unexpectedly, Volcan 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 Volcan will offset losses from the drop in Volcan's long position.| FARO Technologies vs. Mesa Laboratories | FARO Technologies vs. Itron Inc | FARO Technologies vs. Fortive Corp | FARO Technologies vs. Vishay Precision Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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