Correlation Between FC Investment and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both FC Investment and Ecofin Global 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 Ecofin Global 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 Ecofin Global Utilities, you can compare the effects of market volatilities on FC Investment and Ecofin Global 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 Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Ecofin Global.
Diversification Opportunities for FC Investment and Ecofin Global
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FCIT and Ecofin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of FC Investment i.e., FC Investment and Ecofin Global go up and down completely randomly.
Pair Corralation between FC Investment and Ecofin Global
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.44 times more return on investment than Ecofin Global. However, FC Investment Trust is 2.28 times less risky than Ecofin Global. It trades about -0.01 of its potential returns per unit of risk. Ecofin Global Utilities is currently generating about -0.07 per unit of risk. If you would invest 112,832 in FC Investment Trust on October 13, 2024 and sell it today you would lose (232.00) from holding FC Investment Trust or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Ecofin Global Utilities
Performance |
| Timeline |
| FC Investment Trust |
| Ecofin Global Utilities |
FC Investment and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Ecofin Global
The main advantage of trading using opposite FC Investment and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.| FC Investment vs. Ion Beam Applications | FC Investment vs. Lundin Mining Corp | FC Investment vs. Various Eateries PLC | FC Investment vs. GlobalData PLC |
| Ecofin Global vs. Tavistock Investments Plc | Ecofin Global vs. Melia Hotels | Ecofin Global vs. Lindsell Train Investment | Ecofin Global vs. Smithson 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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