Correlation Between FC Investment and Datagroup
Can any of the company-specific risk be diversified away by investing in both FC Investment and Datagroup 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 Datagroup 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 Datagroup SE, you can compare the effects of market volatilities on FC Investment and Datagroup 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 Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Datagroup.
Diversification Opportunities for FC Investment and Datagroup
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FCIT and Datagroup is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE 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 Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of FC Investment i.e., FC Investment and Datagroup go up and down completely randomly.
Pair Corralation between FC Investment and Datagroup
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.58 times more return on investment than Datagroup. However, FC Investment Trust is 1.73 times less risky than Datagroup. It trades about 0.37 of its potential returns per unit of risk. Datagroup SE is currently generating about -0.15 per unit of risk. If you would invest 111,196 in FC Investment Trust on October 29, 2024 and sell it today you would earn a total of 6,604 from holding FC Investment Trust or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Datagroup SE
Performance |
| Timeline |
| FC Investment Trust |
| Datagroup SE |
FC Investment and Datagroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Datagroup
The main advantage of trading using opposite FC Investment and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.| FC Investment vs. Wheaton Precious Metals | FC Investment vs. First Class Metals | FC Investment vs. Made Tech Group | FC Investment vs. CAP LEASE AVIATION |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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