Correlation Between Ferguson Plc and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Ferguson Plc and Beeks Trading 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 Ferguson Plc and Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferguson Plc and Beeks Trading, you can compare the effects of market volatilities on Ferguson Plc and Beeks Trading 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 Ferguson Plc with a short position of Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferguson Plc and Beeks Trading.
Diversification Opportunities for Ferguson Plc and Beeks Trading
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ferguson and Beeks is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ferguson Plc and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading and Ferguson Plc 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 Ferguson Plc are associated (or correlated) with Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Ferguson Plc i.e., Ferguson Plc and Beeks Trading go up and down completely randomly.
Pair Corralation between Ferguson Plc and Beeks Trading
Assuming the 90 days trading horizon Ferguson Plc is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, Ferguson Plc is 1.78 times less risky than Beeks Trading. The stock trades about 0.0 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13,750 in Beeks Trading on November 3, 2024 and sell it today you would earn a total of 14,650 from holding Beeks Trading or generate 106.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ferguson Plc vs. Beeks Trading
Performance |
| Timeline |
| Ferguson Plc |
| Beeks Trading |
Ferguson Plc and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferguson Plc and Beeks Trading
The main advantage of trading using opposite Ferguson Plc and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferguson Plc position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Ferguson Plc vs. Synthomer plc | Ferguson Plc vs. JD Sports Fashion | Ferguson Plc vs. National Beverage Corp | Ferguson Plc vs. DFS Furniture PLC |
| Beeks Trading vs. International Consolidated Airlines | Beeks Trading vs. Playtech Plc | Beeks Trading vs. Bloomsbury Publishing Plc | Beeks Trading vs. Rosslyn Data Technologies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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