Correlation Between Fernhill Corp and AB International
Can any of the company-specific risk be diversified away by investing in both Fernhill Corp and AB International 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 Fernhill Corp and AB International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fernhill Corp and AB International Group, you can compare the effects of market volatilities on Fernhill Corp and AB International 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 Fernhill Corp with a short position of AB International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fernhill Corp and AB International.
Diversification Opportunities for Fernhill Corp and AB International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fernhill and ABQQ is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fernhill Corp and AB International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB International and Fernhill Corp 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 Fernhill Corp are associated (or correlated) with AB International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB International has no effect on the direction of Fernhill Corp i.e., Fernhill Corp and AB International go up and down completely randomly.
Pair Corralation between Fernhill Corp and AB International
Given the investment horizon of 90 days Fernhill Corp is expected to generate 19.23 times less return on investment than AB International. But when comparing it to its historical volatility, Fernhill Corp is 3.11 times less risky than AB International. It trades about 0.04 of its potential returns per unit of risk. AB International Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.04 in AB International Group on August 24, 2024 and sell it today you would earn a total of 0.04 from holding AB International Group or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fernhill Corp vs. AB International Group
Performance |
| Timeline |
| Fernhill Corp |
| AB International |
Fernhill Corp and AB International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fernhill Corp and AB International
The main advantage of trading using opposite Fernhill Corp and AB International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fernhill Corp position performs unexpectedly, AB International 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 AB International will offset losses from the drop in AB International's long position.| Fernhill Corp vs. Salesforce | Fernhill Corp vs. SAP SE ADR | Fernhill Corp vs. ServiceNow | Fernhill Corp vs. Intuit Inc |
| AB International vs. Boxlight Corp Class | AB International vs. Siyata Mobile | AB International vs. ClearOne | AB International vs. HUMANA INC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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