Correlation Between FG Merger and Western Digital
Can any of the company-specific risk be diversified away by investing in both FG Merger and Western Digital 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 FG Merger and Western Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Merger Corp and Western Digital, you can compare the effects of market volatilities on FG Merger and Western Digital 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 FG Merger with a short position of Western Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Merger and Western Digital.
Diversification Opportunities for FG Merger and Western Digital
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FGMCW and Western is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding FG Merger Corp and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital and FG Merger 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 FG Merger Corp are associated (or correlated) with Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of FG Merger i.e., FG Merger and Western Digital go up and down completely randomly.
Pair Corralation between FG Merger and Western Digital
If you would invest 6,396 in Western Digital on September 13, 2024 and sell it today you would earn a total of 534.00 from holding Western Digital or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
FG Merger Corp vs. Western Digital
Performance |
| Timeline |
| FG Merger Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Digital |
FG Merger and Western Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Merger and Western Digital
The main advantage of trading using opposite FG Merger and Western Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Merger position performs unexpectedly, Western Digital 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 Western Digital will offset losses from the drop in Western Digital's long position.| FG Merger vs. Insteel Industries | FG Merger vs. Regeneron Pharmaceuticals | FG Merger vs. Getty Copper | FG Merger vs. BioNTech SE |
| Western Digital vs. NetApp Inc | Western Digital vs. Logitech International SA | Western Digital vs. HP Inc | Western Digital vs. Dell Technologies |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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