Correlation Between Fenbo Holdings and American Outdoor
Can any of the company-specific risk be diversified away by investing in both Fenbo Holdings and American Outdoor 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 Fenbo Holdings and American Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fenbo Holdings Limited and American Outdoor Brands, you can compare the effects of market volatilities on Fenbo Holdings and American Outdoor 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 Fenbo Holdings with a short position of American Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenbo Holdings and American Outdoor.
Diversification Opportunities for Fenbo Holdings and American Outdoor
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fenbo and American is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fenbo Holdings Limited and American Outdoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Outdoor Brands and Fenbo Holdings 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 Fenbo Holdings Limited are associated (or correlated) with American Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Outdoor Brands has no effect on the direction of Fenbo Holdings i.e., Fenbo Holdings and American Outdoor go up and down completely randomly.
Pair Corralation between Fenbo Holdings and American Outdoor
Given the investment horizon of 90 days Fenbo Holdings Limited is expected to under-perform the American Outdoor. In addition to that, Fenbo Holdings is 3.57 times more volatile than American Outdoor Brands. It trades about -0.18 of its total potential returns per unit of risk. American Outdoor Brands is currently generating about 0.06 per unit of volatility. If you would invest 930.00 in American Outdoor Brands on August 27, 2024 and sell it today you would earn a total of 27.00 from holding American Outdoor Brands or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fenbo Holdings Limited vs. American Outdoor Brands
Performance |
| Timeline |
| Fenbo Holdings |
| American Outdoor Brands |
Fenbo Holdings and American Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fenbo Holdings and American Outdoor
The main advantage of trading using opposite Fenbo Holdings and American Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenbo Holdings position performs unexpectedly, American Outdoor 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 American Outdoor will offset losses from the drop in American Outdoor's long position.| Fenbo Holdings vs. Amer Sports, | Fenbo Holdings vs. Brunswick | Fenbo Holdings vs. Ralph Lauren Corp | Fenbo Holdings vs. Under Armour C |
| American Outdoor vs. Clarus Corp | American Outdoor vs. Escalade Incorporated | American Outdoor vs. Johnson Outdoors | American Outdoor vs. JAKKS Pacific |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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