Correlation Between FibraHotel and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both FibraHotel and Advanced Micro 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 FibraHotel and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Advanced Micro Devices, you can compare the effects of market volatilities on FibraHotel and Advanced Micro 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 FibraHotel with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Advanced Micro.
Diversification Opportunities for FibraHotel and Advanced Micro
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FibraHotel and Advanced is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and FibraHotel 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 FibraHotel are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of FibraHotel i.e., FibraHotel and Advanced Micro go up and down completely randomly.
Pair Corralation between FibraHotel and Advanced Micro
Assuming the 90 days trading horizon FibraHotel is expected to under-perform the Advanced Micro. But the stock apears to be less risky and, when comparing its historical volatility, FibraHotel is 1.43 times less risky than Advanced Micro. The stock trades about 0.0 of its potential returns per unit of risk. The Advanced Micro Devices is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 210,288 in Advanced Micro Devices on August 31, 2024 and sell it today you would earn a total of 71,412 from holding Advanced Micro Devices or generate 33.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
FibraHotel vs. Advanced Micro Devices
Performance |
| Timeline |
| FibraHotel |
| Advanced Micro Devices |
FibraHotel and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Advanced Micro
The main advantage of trading using opposite FibraHotel and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| FibraHotel vs. Sony Group | FibraHotel vs. Barclays PLC | FibraHotel vs. HSBC Holdings plc | FibraHotel vs. Taiwan Semiconductor Manufacturing |
| Advanced Micro vs. NVIDIA | Advanced Micro vs. Texas Instruments Incorporated | Advanced Micro vs. Intel | Advanced Micro vs. Micron Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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