Correlation Between FBC HOLDINGS and Revitus Property
Can any of the company-specific risk be diversified away by investing in both FBC HOLDINGS and Revitus Property 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 FBC HOLDINGS and Revitus Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FBC HOLDINGS LIMITED and Revitus Property Opportunities, you can compare the effects of market volatilities on FBC HOLDINGS and Revitus Property 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 FBC HOLDINGS with a short position of Revitus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of FBC HOLDINGS and Revitus Property.
Diversification Opportunities for FBC HOLDINGS and Revitus Property
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FBC and Revitus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FBC HOLDINGS LIMITED and Revitus Property Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revitus Property Opp and FBC HOLDINGS 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 FBC HOLDINGS LIMITED are associated (or correlated) with Revitus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revitus Property Opp has no effect on the direction of FBC HOLDINGS i.e., FBC HOLDINGS and Revitus Property go up and down completely randomly.
Pair Corralation between FBC HOLDINGS and Revitus Property
Assuming the 90 days trading horizon FBC HOLDINGS LIMITED is expected to generate 0.14 times more return on investment than Revitus Property. However, FBC HOLDINGS LIMITED is 7.24 times less risky than Revitus Property. It trades about -0.37 of its potential returns per unit of risk. Revitus Property Opportunities is currently generating about -0.14 per unit of risk. If you would invest 124,083 in FBC HOLDINGS LIMITED on August 30, 2024 and sell it today you would lose (4,083) from holding FBC HOLDINGS LIMITED or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
FBC HOLDINGS LIMITED vs. Revitus Property Opportunities
Performance |
| Timeline |
| FBC HOLDINGS LIMITED |
| Revitus Property Opp |
FBC HOLDINGS and Revitus Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FBC HOLDINGS and Revitus Property
The main advantage of trading using opposite FBC HOLDINGS and Revitus Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FBC HOLDINGS position performs unexpectedly, Revitus Property 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 Revitus Property will offset losses from the drop in Revitus Property's long position.| FBC HOLDINGS vs. STAR AFRICA PORATION | FBC HOLDINGS vs. CAFCA LIMITED | FBC HOLDINGS vs. FIRST MUTUAL PROPERTIES | FBC HOLDINGS vs. AFRICAN DISTILLERS LIMITED |
| Revitus Property vs. FIRST MUTUAL PROPERTIES | Revitus Property vs. BRITISH AMERICAN TOBACCO | Revitus Property vs. TANGANDA TEA PANY | Revitus Property vs. ZB FINANCIAL HOLDINGS |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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