Correlation Between Figs and Cencora
Can any of the company-specific risk be diversified away by investing in both Figs and Cencora 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 Figs and Cencora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Cencora, you can compare the effects of market volatilities on Figs and Cencora 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 Figs with a short position of Cencora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Cencora.
Diversification Opportunities for Figs and Cencora
Excellent diversification
The 3 months correlation between Figs and Cencora is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora and Figs 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 Figs Inc are associated (or correlated) with Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Figs i.e., Figs and Cencora go up and down completely randomly.
Pair Corralation between Figs and Cencora
Given the investment horizon of 90 days Figs Inc is expected to under-perform the Cencora. In addition to that, Figs is 4.56 times more volatile than Cencora. It trades about -0.13 of its total potential returns per unit of risk. Cencora is currently generating about 0.16 per unit of volatility. If you would invest 23,304 in Cencora on August 28, 2024 and sell it today you would earn a total of 1,119 from holding Cencora or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Cencora
Performance |
| Timeline |
| Figs Inc |
| Cencora |
Figs and Cencora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Cencora
The main advantage of trading using opposite Figs and Cencora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs position performs unexpectedly, Cencora 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 Cencora will offset losses from the drop in Cencora's long position.The idea behind Figs Inc and Cencora pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cencora vs. Vita Coco | Cencora vs. RadNet Inc | Cencora vs. Thai Beverage PCL | Cencora vs. Compania Cervecerias Unidas |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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