Correlation Between Fletcher King and M Winkworth
Can any of the company-specific risk be diversified away by investing in both Fletcher King and M Winkworth 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 Fletcher King and M Winkworth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fletcher King Plc and M Winkworth PLC, you can compare the effects of market volatilities on Fletcher King and M Winkworth 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 Fletcher King with a short position of M Winkworth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fletcher King and M Winkworth.
Diversification Opportunities for Fletcher King and M Winkworth
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fletcher and WINK is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fletcher King Plc and M Winkworth PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Winkworth PLC and Fletcher King 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 Fletcher King Plc are associated (or correlated) with M Winkworth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Winkworth PLC has no effect on the direction of Fletcher King i.e., Fletcher King and M Winkworth go up and down completely randomly.
Pair Corralation between Fletcher King and M Winkworth
Assuming the 90 days trading horizon Fletcher King is expected to generate 4.64 times less return on investment than M Winkworth. In addition to that, Fletcher King is 1.15 times more volatile than M Winkworth PLC. It trades about 0.01 of its total potential returns per unit of risk. M Winkworth PLC is currently generating about 0.04 per unit of volatility. If you would invest 14,779 in M Winkworth PLC on November 2, 2024 and sell it today you would earn a total of 5,221 from holding M Winkworth PLC or generate 35.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fletcher King Plc vs. M Winkworth PLC
Performance |
| Timeline |
| Fletcher King Plc |
| M Winkworth PLC |
Fletcher King and M Winkworth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fletcher King and M Winkworth
The main advantage of trading using opposite Fletcher King and M Winkworth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fletcher King position performs unexpectedly, M Winkworth 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 M Winkworth will offset losses from the drop in M Winkworth's long position.| Fletcher King vs. Datalogic | Fletcher King vs. Games Workshop Group | Fletcher King vs. Beazer Homes USA | Fletcher King vs. Automatic Data Processing |
| M Winkworth vs. Software Circle plc | M Winkworth vs. Ecclesiastical Insurance Office | M Winkworth vs. Molson Coors Beverage | M Winkworth vs. Alfa Financial Software |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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