Correlation Between Figaro Coffee and Concepcion Industrial
Can any of the company-specific risk be diversified away by investing in both Figaro Coffee and Concepcion Industrial 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 Figaro Coffee and Concepcion Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figaro Coffee Group and Concepcion Industrial Corp, you can compare the effects of market volatilities on Figaro Coffee and Concepcion Industrial 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 Figaro Coffee with a short position of Concepcion Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Concepcion Industrial.
Diversification Opportunities for Figaro Coffee and Concepcion Industrial
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Figaro and Concepcion is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee Group and Concepcion Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concepcion Industrial and Figaro Coffee 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 Figaro Coffee Group are associated (or correlated) with Concepcion Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concepcion Industrial has no effect on the direction of Figaro Coffee i.e., Figaro Coffee and Concepcion Industrial go up and down completely randomly.
Pair Corralation between Figaro Coffee and Concepcion Industrial
Assuming the 90 days trading horizon Figaro Coffee Group is expected to generate 1.53 times more return on investment than Concepcion Industrial. However, Figaro Coffee is 1.53 times more volatile than Concepcion Industrial Corp. It trades about -0.02 of its potential returns per unit of risk. Concepcion Industrial Corp is currently generating about -0.05 per unit of risk. If you would invest 86.00 in Figaro Coffee Group on September 13, 2024 and sell it today you would lose (3.00) from holding Figaro Coffee Group or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Figaro Coffee Group vs. Concepcion Industrial Corp
Performance |
| Timeline |
| Figaro Coffee Group |
| Concepcion Industrial |
Figaro Coffee and Concepcion Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figaro Coffee and Concepcion Industrial
The main advantage of trading using opposite Figaro Coffee and Concepcion Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee position performs unexpectedly, Concepcion Industrial 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 Concepcion Industrial will offset losses from the drop in Concepcion Industrial's long position.| Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. Pacificonline Systems | Figaro Coffee vs. GT Capital Holdings | Figaro Coffee vs. Allhome Corp |
| Concepcion Industrial vs. COL Financial Group | Concepcion Industrial vs. Figaro Coffee Group | Concepcion Industrial vs. Metropolitan Bank Trust | Concepcion Industrial vs. Jollibee Foods Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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