Correlation Between FirstGroup Plc and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both FirstGroup Plc and STORE ELECTRONIC 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 FirstGroup Plc and STORE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstGroup plc and STORE ELECTRONIC, you can compare the effects of market volatilities on FirstGroup Plc and STORE ELECTRONIC 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 FirstGroup Plc with a short position of STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstGroup Plc and STORE ELECTRONIC.
Diversification Opportunities for FirstGroup Plc and STORE ELECTRONIC
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FirstGroup and STORE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding FirstGroup plc and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC and FirstGroup Plc 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 FirstGroup plc are associated (or correlated) with STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of FirstGroup Plc i.e., FirstGroup Plc and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between FirstGroup Plc and STORE ELECTRONIC
Assuming the 90 days horizon FirstGroup Plc is expected to generate 2.05 times less return on investment than STORE ELECTRONIC. But when comparing it to its historical volatility, FirstGroup plc is 1.63 times less risky than STORE ELECTRONIC. It trades about 0.03 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,254 in STORE ELECTRONIC on September 4, 2024 and sell it today you would earn a total of 2,826 from holding STORE ELECTRONIC or generate 25.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
FirstGroup plc vs. STORE ELECTRONIC
Performance |
| Timeline |
| FirstGroup plc |
| STORE ELECTRONIC |
FirstGroup Plc and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstGroup Plc and STORE ELECTRONIC
The main advantage of trading using opposite FirstGroup Plc and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstGroup Plc position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| FirstGroup Plc vs. Motorcar Parts of | FirstGroup Plc vs. CENTURIA OFFICE REIT | FirstGroup Plc vs. CarsalesCom | FirstGroup Plc vs. Tri Pointe Homes |
| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
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.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| CEOs Directory Screen CEOs from public companies around the world |