Correlation Between Fenbo Holdings and Peloton Interactive
Can any of the company-specific risk be diversified away by investing in both Fenbo Holdings and Peloton Interactive 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 Peloton Interactive 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 Peloton Interactive, you can compare the effects of market volatilities on Fenbo Holdings and Peloton Interactive 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 Peloton Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenbo Holdings and Peloton Interactive.
Diversification Opportunities for Fenbo Holdings and Peloton Interactive
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fenbo and Peloton is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fenbo Holdings Limited and Peloton Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Interactive 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 Peloton Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Interactive has no effect on the direction of Fenbo Holdings i.e., Fenbo Holdings and Peloton Interactive go up and down completely randomly.
Pair Corralation between Fenbo Holdings and Peloton Interactive
Given the investment horizon of 90 days Fenbo Holdings Limited is expected to under-perform the Peloton Interactive. But the stock apears to be less risky and, when comparing its historical volatility, Fenbo Holdings Limited is 1.06 times less risky than Peloton Interactive. The stock trades about -0.38 of its potential returns per unit of risk. The Peloton Interactive is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Peloton Interactive on August 27, 2024 and sell it today you would earn a total of 314.00 from holding Peloton Interactive or generate 49.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fenbo Holdings Limited vs. Peloton Interactive
Performance |
| Timeline |
| Fenbo Holdings |
| Peloton Interactive |
Fenbo Holdings and Peloton Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fenbo Holdings and Peloton Interactive
The main advantage of trading using opposite Fenbo Holdings and Peloton Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenbo Holdings position performs unexpectedly, Peloton Interactive 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 Peloton Interactive will offset losses from the drop in Peloton Interactive's long position.| Fenbo Holdings vs. Amer Sports, | Fenbo Holdings vs. Brunswick | Fenbo Holdings vs. Ralph Lauren Corp | Fenbo Holdings vs. Under Armour C |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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