Correlation Between FutureFuel Corp and Perimeter Solutions
Can any of the company-specific risk be diversified away by investing in both FutureFuel Corp and Perimeter Solutions 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 Perimeter Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FutureFuel Corp and Perimeter Solutions SA, you can compare the effects of market volatilities on FutureFuel Corp and Perimeter Solutions 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 Perimeter Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of FutureFuel Corp and Perimeter Solutions.
Diversification Opportunities for FutureFuel Corp and Perimeter Solutions
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between FutureFuel and Perimeter is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding FutureFuel Corp and Perimeter Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Solutions 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 Perimeter Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Solutions has no effect on the direction of FutureFuel Corp i.e., FutureFuel Corp and Perimeter Solutions go up and down completely randomly.
Pair Corralation between FutureFuel Corp and Perimeter Solutions
Allowing for the 90-day total investment horizon FutureFuel Corp is expected to under-perform the Perimeter Solutions. In addition to that, FutureFuel Corp is 1.12 times more volatile than Perimeter Solutions SA. It trades about -0.18 of its total potential returns per unit of risk. Perimeter Solutions SA is currently generating about -0.02 per unit of volatility. If you would invest 1,347 in Perimeter Solutions SA on August 28, 2024 and sell it today you would lose (36.00) from holding Perimeter Solutions SA or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FutureFuel Corp vs. Perimeter Solutions SA
Performance |
| Timeline |
| FutureFuel Corp |
| Perimeter Solutions |
FutureFuel Corp and Perimeter Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FutureFuel Corp and Perimeter Solutions
The main advantage of trading using opposite FutureFuel Corp and Perimeter Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FutureFuel Corp position performs unexpectedly, Perimeter Solutions 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 Perimeter Solutions will offset losses from the drop in Perimeter Solutions' long position.| FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. H B Fuller | FutureFuel Corp vs. Northern Technologies | FutureFuel Corp vs. Cabot |
| Perimeter Solutions vs. Orion Engineered Carbons | Perimeter Solutions vs. Cabot | Perimeter Solutions vs. Minerals Technologies | Perimeter Solutions vs. Quaker Chemical |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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