Correlation Between Fundamental Global and Equitable Holdings
Can any of the company-specific risk be diversified away by investing in both Fundamental Global and Equitable Holdings 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 Fundamental Global and Equitable Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and Equitable Holdings, you can compare the effects of market volatilities on Fundamental Global and Equitable Holdings 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 Fundamental Global with a short position of Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and Equitable Holdings.
Diversification Opportunities for Fundamental Global and Equitable Holdings
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fundamental and Equitable is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings and Fundamental Global 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 Fundamental Global are associated (or correlated) with Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of Fundamental Global i.e., Fundamental Global and Equitable Holdings go up and down completely randomly.
Pair Corralation between Fundamental Global and Equitable Holdings
Assuming the 90 days horizon Fundamental Global is expected to generate 3.43 times more return on investment than Equitable Holdings. However, Fundamental Global is 3.43 times more volatile than Equitable Holdings. It trades about 0.02 of its potential returns per unit of risk. Equitable Holdings is currently generating about 0.03 per unit of risk. If you would invest 1,598 in Fundamental Global on November 9, 2024 and sell it today you would earn a total of 29.00 from holding Fundamental Global or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Global vs. Equitable Holdings
Performance |
| Timeline |
| Fundamental Global |
| Equitable Holdings |
Fundamental Global and Equitable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and Equitable Holdings
The main advantage of trading using opposite Fundamental Global and Equitable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global position performs unexpectedly, Equitable Holdings 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 Equitable Holdings will offset losses from the drop in Equitable Holdings' long position.| Fundamental Global vs. FAT Brands | Fundamental Global vs. Fortress Biotech Pref | Fundamental Global vs. Fulton Financial |
| Equitable Holdings vs. Capital One Financial | Equitable Holdings vs. Citizens Financial Group | Equitable Holdings vs. Equitable Holdings | Equitable Holdings vs. MetLife Preferred Stock |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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