Correlation Between FTI Consulting and ESGL Holdings
Can any of the company-specific risk be diversified away by investing in both FTI Consulting and ESGL Holdings 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 FTI Consulting and ESGL Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTI Consulting and ESGL Holdings Limited, you can compare the effects of market volatilities on FTI Consulting and ESGL Holdings 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 FTI Consulting with a short position of ESGL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTI Consulting and ESGL Holdings.
Diversification Opportunities for FTI Consulting and ESGL Holdings
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FTI and ESGL is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding FTI Consulting and ESGL Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGL Holdings Limited and FTI Consulting 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 FTI Consulting are associated (or correlated) with ESGL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGL Holdings Limited has no effect on the direction of FTI Consulting i.e., FTI Consulting and ESGL Holdings go up and down completely randomly.
Pair Corralation between FTI Consulting and ESGL Holdings
Considering the 90-day investment horizon FTI Consulting is expected to under-perform the ESGL Holdings. But the stock apears to be less risky and, when comparing its historical volatility, FTI Consulting is 7.61 times less risky than ESGL Holdings. The stock trades about -0.11 of its potential returns per unit of risk. The ESGL Holdings Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.10 in ESGL Holdings Limited on August 30, 2024 and sell it today you would earn a total of 0.59 from holding ESGL Holdings Limited or generate 53.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.7% |
| Values | Daily Returns |
FTI Consulting vs. ESGL Holdings Limited
Performance |
| Timeline |
| FTI Consulting |
| ESGL Holdings Limited |
FTI Consulting and ESGL Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTI Consulting and ESGL Holdings
The main advantage of trading using opposite FTI Consulting and ESGL Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTI Consulting position performs unexpectedly, ESGL Holdings 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 ESGL Holdings will offset losses from the drop in ESGL Holdings' long position.| FTI Consulting vs. Forrester Research | FTI Consulting vs. Huron Consulting Group | FTI Consulting vs. ICF International | FTI Consulting vs. Franklin Covey |
| ESGL Holdings vs. CRA International | ESGL Holdings vs. ICF International | ESGL Holdings vs. Forrester Research | ESGL Holdings vs. Huron Consulting Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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