Correlation Between FC Investment and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both FC Investment and Leroy Seafood 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 FC Investment and Leroy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Leroy Seafood Group, you can compare the effects of market volatilities on FC Investment and Leroy Seafood 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 FC Investment with a short position of Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Leroy Seafood.
Diversification Opportunities for FC Investment and Leroy Seafood
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FCIT and Leroy is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group and FC Investment 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 FC Investment Trust are associated (or correlated) with Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of FC Investment i.e., FC Investment and Leroy Seafood go up and down completely randomly.
Pair Corralation between FC Investment and Leroy Seafood
Assuming the 90 days trading horizon FC Investment is expected to generate 1.32 times less return on investment than Leroy Seafood. But when comparing it to its historical volatility, FC Investment Trust is 2.09 times less risky than Leroy Seafood. It trades about 0.09 of its potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,594 in Leroy Seafood Group on September 3, 2024 and sell it today you would earn a total of 584.00 from holding Leroy Seafood Group or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Leroy Seafood Group
Performance |
| Timeline |
| FC Investment Trust |
| Leroy Seafood Group |
FC Investment and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Leroy Seafood
The main advantage of trading using opposite FC Investment and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| FC Investment vs. SupplyMe Capital PLC | FC Investment vs. 88 Energy | FC Investment vs. Vodafone Group PLC | FC Investment vs. Vodafone Group PLC |
| Leroy Seafood vs. GlobalData PLC | Leroy Seafood vs. Evolution Gaming Group | Leroy Seafood vs. New Residential Investment | Leroy Seafood vs. FC Investment Trust |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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