Correlation Between FireFly Metals and Vitura Health
Can any of the company-specific risk be diversified away by investing in both FireFly Metals and Vitura Health 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 FireFly Metals and Vitura Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FireFly Metals and Vitura Health Limited, you can compare the effects of market volatilities on FireFly Metals and Vitura Health 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 FireFly Metals with a short position of Vitura Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of FireFly Metals and Vitura Health.
Diversification Opportunities for FireFly Metals and Vitura Health
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FireFly and Vitura is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FireFly Metals and Vitura Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitura Health Limited and FireFly Metals 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 FireFly Metals are associated (or correlated) with Vitura Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitura Health Limited has no effect on the direction of FireFly Metals i.e., FireFly Metals and Vitura Health go up and down completely randomly.
Pair Corralation between FireFly Metals and Vitura Health
Assuming the 90 days trading horizon FireFly Metals is expected to generate 1.9 times less return on investment than Vitura Health. But when comparing it to its historical volatility, FireFly Metals is 1.09 times less risky than Vitura Health. It trades about 0.03 of its potential returns per unit of risk. Vitura Health Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7.80 in Vitura Health Limited on October 26, 2024 and sell it today you would earn a total of 0.20 from holding Vitura Health Limited or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FireFly Metals vs. Vitura Health Limited
Performance |
| Timeline |
| FireFly Metals |
| Vitura Health Limited |
FireFly Metals and Vitura Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FireFly Metals and Vitura Health
The main advantage of trading using opposite FireFly Metals and Vitura Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FireFly Metals position performs unexpectedly, Vitura Health 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 Vitura Health will offset losses from the drop in Vitura Health's long position.| FireFly Metals vs. Vitura Health Limited | FireFly Metals vs. Ras Technology Holdings | FireFly Metals vs. Ainsworth Game Technology | FireFly Metals vs. Zoom2u Technologies |
| Vitura Health vs. BSP Financial Group | Vitura Health vs. Perpetual Credit Income | Vitura Health vs. Energy Technologies Limited | Vitura Health vs. Medibank Private |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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