Correlation Between Fernhill Corp and Protek Capital
Can any of the company-specific risk be diversified away by investing in both Fernhill Corp and Protek Capital 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 Protek Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fernhill Corp and Protek Capital, you can compare the effects of market volatilities on Fernhill Corp and Protek Capital 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 Protek Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fernhill Corp and Protek Capital.
Diversification Opportunities for Fernhill Corp and Protek Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fernhill and Protek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fernhill Corp and Protek Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protek Capital 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 Protek Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protek Capital has no effect on the direction of Fernhill Corp i.e., Fernhill Corp and Protek Capital go up and down completely randomly.
Pair Corralation between Fernhill Corp and Protek Capital
Given the investment horizon of 90 days Fernhill Corp is expected to generate 53.98 times less return on investment than Protek Capital. But when comparing it to its historical volatility, Fernhill Corp is 8.44 times less risky than Protek Capital. It trades about 0.01 of its potential returns per unit of risk. Protek Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Protek Capital on August 31, 2024 and sell it today you would lose (0.01) from holding Protek Capital or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fernhill Corp vs. Protek Capital
Performance |
| Timeline |
| Fernhill Corp |
| Protek Capital |
Fernhill Corp and Protek Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fernhill Corp and Protek Capital
The main advantage of trading using opposite Fernhill Corp and Protek Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fernhill Corp position performs unexpectedly, Protek Capital 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 Protek Capital will offset losses from the drop in Protek Capital's long position.| Fernhill Corp vs. Protek Capital | Fernhill Corp vs. On4 Communications | Fernhill Corp vs. Bowmo Inc | Fernhill Corp vs. BHPA Inc |
| Protek Capital vs. Waldencast Acquisition Corp | Protek Capital vs. Alkami Technology | Protek Capital vs. ADEIA P | Protek Capital vs. Paycor HCM |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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