Correlation Between FCS Software and Samhi Hotels

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Can any of the company-specific risk be diversified away by investing in both FCS Software and Samhi Hotels 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 FCS Software and Samhi Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FCS Software Solutions and Samhi Hotels Limited, you can compare the effects of market volatilities on FCS Software and Samhi Hotels 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 FCS Software with a short position of Samhi Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of FCS Software and Samhi Hotels.

Diversification Opportunities for FCS Software and Samhi Hotels

FCSSamhiDiversified AwayFCSSamhiDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between FCS and Samhi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding FCS Software Solutions and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi Hotels Limited and FCS Software 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 FCS Software Solutions are associated (or correlated) with Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of FCS Software i.e., FCS Software and Samhi Hotels go up and down completely randomly.

Pair Corralation between FCS Software and Samhi Hotels

Assuming the 90 days trading horizon FCS Software Solutions is expected to generate 1.59 times more return on investment than Samhi Hotels. However, FCS Software is 1.59 times more volatile than Samhi Hotels Limited. It trades about 0.03 of its potential returns per unit of risk. Samhi Hotels Limited is currently generating about 0.01 per unit of risk. If you would invest  205.00  in FCS Software Solutions on December 11, 2024 and sell it today you would earn a total of  64.00  from holding FCS Software Solutions or generate 31.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy74.69%
ValuesDaily Returns

FCS Software Solutions  vs.  Samhi Hotels Limited

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-100
JavaScript chart by amCharts 3.21.15FCSSOFT SAMHI
       Timeline  
FCS Software Solutions 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days FCS Software Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar2.42.62.833.23.43.6
Samhi Hotels Limited 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Samhi Hotels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar140150160170180190200210

FCS Software and Samhi Hotels Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.99-5.24-3.48-1.730.01.643.34.966.63 0.0200.0250.0300.0350.0400.0450.050
JavaScript chart by amCharts 3.21.15FCSSOFT SAMHI
       Returns  

Pair Trading with FCS Software and Samhi Hotels

The main advantage of trading using opposite FCS Software and Samhi Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FCS Software position performs unexpectedly, Samhi Hotels 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 Samhi Hotels will offset losses from the drop in Samhi Hotels' long position.
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The idea behind FCS Software Solutions and Samhi Hotels Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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