Correlation Between FutureFuel Corp and Akzo Nobel
Can any of the company-specific risk be diversified away by investing in both FutureFuel Corp and Akzo Nobel 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 FutureFuel Corp and Akzo Nobel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FutureFuel Corp and Akzo Nobel NV, you can compare the effects of market volatilities on FutureFuel Corp and Akzo Nobel 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 FutureFuel Corp with a short position of Akzo Nobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FutureFuel Corp and Akzo Nobel.
Diversification Opportunities for FutureFuel Corp and Akzo Nobel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FutureFuel and Akzo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FutureFuel Corp and Akzo Nobel NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akzo Nobel NV and FutureFuel 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 FutureFuel Corp are associated (or correlated) with Akzo Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akzo Nobel NV has no effect on the direction of FutureFuel Corp i.e., FutureFuel Corp and Akzo Nobel go up and down completely randomly.
Pair Corralation between FutureFuel Corp and Akzo Nobel
If you would invest (100.00) in Akzo Nobel NV on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Akzo Nobel NV or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
FutureFuel Corp vs. Akzo Nobel NV
Performance |
| Timeline |
| FutureFuel Corp |
| Akzo Nobel NV |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
FutureFuel Corp and Akzo Nobel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FutureFuel Corp and Akzo Nobel
The main advantage of trading using opposite FutureFuel Corp and Akzo Nobel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FutureFuel Corp position performs unexpectedly, Akzo Nobel 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 Akzo Nobel will offset losses from the drop in Akzo Nobel's long position.| FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. Quaker Chemical | FutureFuel Corp vs. Ecovyst | FutureFuel Corp vs. Minerals Technologies |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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