Correlation Between FARO Technologies and Winland Holdings
Can any of the company-specific risk be diversified away by investing in both FARO Technologies and Winland Holdings 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 FARO Technologies and Winland Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARO Technologies and Winland Holdings, you can compare the effects of market volatilities on FARO Technologies and Winland Holdings 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 Winland Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and Winland Holdings.
Diversification Opportunities for FARO Technologies and Winland Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FARO and Winland is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies and Winland Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winland Holdings 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 Winland Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winland Holdings has no effect on the direction of FARO Technologies i.e., FARO Technologies and Winland Holdings go up and down completely randomly.
Pair Corralation between FARO Technologies and Winland Holdings
If you would invest 1,860 in FARO Technologies on August 27, 2024 and sell it today you would earn a total of 840.00 from holding FARO Technologies or generate 45.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
FARO Technologies vs. Winland Holdings
Performance |
| Timeline |
| FARO Technologies |
| Winland Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FARO Technologies and Winland Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARO Technologies and Winland Holdings
The main advantage of trading using opposite FARO Technologies and Winland Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARO Technologies position performs unexpectedly, Winland Holdings 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 Winland Holdings will offset losses from the drop in Winland Holdings' long position.| FARO Technologies vs. ESCO Technologies | FARO Technologies vs. Genasys | FARO Technologies vs. Cepton Inc | FARO Technologies vs. Darkpulse |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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