Correlation Between Fedbank Financial and Rico Auto
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By analyzing existing cross correlation between Fedbank Financial Services and Rico Auto Industries, you can compare the effects of market volatilities on Fedbank Financial and Rico Auto 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 Fedbank Financial with a short position of Rico Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fedbank Financial and Rico Auto.
Diversification Opportunities for Fedbank Financial and Rico Auto
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fedbank and Rico is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fedbank Financial Services and Rico Auto Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rico Auto Industries and Fedbank Financial 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 Fedbank Financial Services are associated (or correlated) with Rico Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rico Auto Industries has no effect on the direction of Fedbank Financial i.e., Fedbank Financial and Rico Auto go up and down completely randomly.
Pair Corralation between Fedbank Financial and Rico Auto
Assuming the 90 days trading horizon Fedbank Financial Services is expected to under-perform the Rico Auto. But the stock apears to be less risky and, when comparing its historical volatility, Fedbank Financial Services is 4.66 times less risky than Rico Auto. The stock trades about -0.48 of its potential returns per unit of risk. The Rico Auto Industries is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 9,093 in Rico Auto Industries on October 15, 2024 and sell it today you would lose (470.00) from holding Rico Auto Industries or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fedbank Financial Services vs. Rico Auto Industries
Performance |
| Timeline |
| Fedbank Financial |
| Rico Auto Industries |
Fedbank Financial and Rico Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fedbank Financial and Rico Auto
The main advantage of trading using opposite Fedbank Financial and Rico Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fedbank Financial position performs unexpectedly, Rico Auto 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 Rico Auto will offset losses from the drop in Rico Auto's long position.| Fedbank Financial vs. Kingfa Science Technology | Fedbank Financial vs. Rico Auto Industries | Fedbank Financial vs. GACM Technologies Limited | Fedbank Financial vs. COSMO FIRST LIMITED |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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