Correlation Between Figs and Sanyo Special
Can any of the company-specific risk be diversified away by investing in both Figs and Sanyo Special 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 Sanyo Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Sanyo Special Steel, you can compare the effects of market volatilities on Figs and Sanyo Special 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 Sanyo Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Sanyo Special.
Diversification Opportunities for Figs and Sanyo Special
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Figs and Sanyo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Sanyo Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Special Steel 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 Sanyo Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Special Steel has no effect on the direction of Figs i.e., Figs and Sanyo Special go up and down completely randomly.
Pair Corralation between Figs and Sanyo Special
Given the investment horizon of 90 days Figs Inc is expected to generate 61.35 times more return on investment than Sanyo Special. However, Figs is 61.35 times more volatile than Sanyo Special Steel. It trades about 0.01 of its potential returns per unit of risk. Sanyo Special Steel is currently generating about 0.06 per unit of risk. If you would invest 703.00 in Figs Inc on September 3, 2024 and sell it today you would lose (184.00) from holding Figs Inc or give up 26.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. Sanyo Special Steel
Performance |
| Timeline |
| Figs Inc |
| Sanyo Special Steel |
Figs and Sanyo Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and Sanyo Special
The main advantage of trading using opposite Figs and Sanyo Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs position performs unexpectedly, Sanyo Special 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 Sanyo Special will offset losses from the drop in Sanyo Special's long position.The idea behind Figs Inc and Sanyo Special Steel 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.| Sanyo Special vs. PVH Corp | Sanyo Special vs. Burlington Stores | Sanyo Special vs. Figs Inc | Sanyo Special vs. Old Republic International |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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