Correlation Between FC Investment and Global Net
Can any of the company-specific risk be diversified away by investing in both FC Investment and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on FC Investment and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Global Net.
Diversification Opportunities for FC Investment and Global Net
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FCIT and Global is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of FC Investment i.e., FC Investment and Global Net go up and down completely randomly.
Pair Corralation between FC Investment and Global Net
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.45 times more return on investment than Global Net. However, FC Investment Trust is 2.24 times less risky than Global Net. It trades about 0.43 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.14 per unit of risk. If you would invest 106,000 in FC Investment Trust on September 3, 2024 and sell it today you would earn a total of 7,200 from holding FC Investment Trust or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Global Net Lease
Performance |
| Timeline |
| FC Investment Trust |
| Global Net Lease |
FC Investment and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Global Net
The main advantage of trading using opposite FC Investment and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net'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 |
| Global Net vs. Catalyst Media Group | Global Net vs. CATLIN GROUP | Global Net vs. RTW Venture Fund | Global Net vs. Secure Property Development |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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