Correlation Between FC Investment and Edita Food
Can any of the company-specific risk be diversified away by investing in both FC Investment and Edita Food 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 Edita Food 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 Edita Food Industries, you can compare the effects of market volatilities on FC Investment and Edita Food 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 Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Edita Food.
Diversification Opportunities for FC Investment and Edita Food
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FCIT and Edita is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries 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 Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of FC Investment i.e., FC Investment and Edita Food go up and down completely randomly.
Pair Corralation between FC Investment and Edita Food
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 19.71 times more return on investment than Edita Food. However, FC Investment is 19.71 times more volatile than Edita Food Industries. It trades about 0.14 of its potential returns per unit of risk. Edita Food Industries is currently generating about 0.13 per unit of risk. If you would invest 74,260 in FC Investment Trust on November 18, 2024 and sell it today you would earn a total of 44,940 from holding FC Investment Trust or generate 60.52% 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. Edita Food Industries
Performance |
| Timeline |
| FC Investment Trust |
| Edita Food Industries |
FC Investment and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Edita Food
The main advantage of trading using opposite FC Investment and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Edita Food 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 Edita Food will offset losses from the drop in Edita Food's long position.| FC Investment vs. Science in Sport | FC Investment vs. Coeur Mining | FC Investment vs. GreenX Metals | FC Investment vs. JD Sports Fashion |
| Edita Food vs. Spirent Communications plc | Edita Food vs. Check Point Software | Edita Food vs. Fonix Mobile plc | Edita Food vs. Geely Automobile Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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