Correlation Between FC Investment and Bytes Technology
Can any of the company-specific risk be diversified away by investing in both FC Investment and Bytes Technology 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 Bytes Technology 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 Bytes Technology, you can compare the effects of market volatilities on FC Investment and Bytes Technology 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 Bytes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Bytes Technology.
Diversification Opportunities for FC Investment and Bytes Technology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FCIT and Bytes is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology 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 Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of FC Investment i.e., FC Investment and Bytes Technology go up and down completely randomly.
Pair Corralation between FC Investment and Bytes Technology
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.37 times more return on investment than Bytes Technology. However, FC Investment Trust is 2.67 times less risky than Bytes Technology. It trades about 0.36 of its potential returns per unit of risk. Bytes Technology is currently generating about -0.07 per unit of risk. If you would invest 105,600 in FC Investment Trust on August 29, 2024 and sell it today you would earn a total of 6,800 from holding FC Investment Trust or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Bytes Technology
Performance |
| Timeline |
| FC Investment Trust |
| Bytes Technology |
FC Investment and Bytes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Bytes Technology
The main advantage of trading using opposite FC Investment and Bytes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Bytes Technology 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 Bytes Technology will offset losses from the drop in Bytes Technology's long position.| FC Investment vs. Catalyst Media Group | FC Investment vs. Oncimmune Holdings plc | FC Investment vs. Invesco Health Care | FC Investment vs. Coor Service Management |
| Bytes Technology vs. Samsung Electronics Co | Bytes Technology vs. Samsung Electronics Co | Bytes Technology vs. Hyundai Motor | Bytes Technology vs. Toyota Motor 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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