Correlation Between Fluor and ODP
Can any of the company-specific risk be diversified away by investing in both Fluor and ODP 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 Fluor and ODP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluor and The ODP, you can compare the effects of market volatilities on Fluor and ODP 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 Fluor with a short position of ODP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluor and ODP.
Diversification Opportunities for Fluor and ODP
Pay attention - limited upside
The 3 months correlation between Fluor and ODP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and The ODP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP and Fluor 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 Fluor are associated (or correlated) with ODP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP has no effect on the direction of Fluor i.e., Fluor and ODP go up and down completely randomly.
Pair Corralation between Fluor and ODP
Assuming the 90 days trading horizon Fluor is expected to generate 5.8 times more return on investment than ODP. However, Fluor is 5.8 times more volatile than The ODP. It trades about 0.06 of its potential returns per unit of risk. The ODP is currently generating about 0.05 per unit of risk. If you would invest 49,800 in Fluor on August 25, 2024 and sell it today you would earn a total of 48,727 from holding Fluor or generate 97.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluor vs. The ODP
Performance |
| Timeline |
| Fluor |
| ODP |
Fluor and ODP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluor and ODP
The main advantage of trading using opposite Fluor and ODP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluor position performs unexpectedly, ODP 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 ODP will offset losses from the drop in ODP's long position.| Fluor vs. Promotora y Operadora | Fluor vs. OPERADORA DE SITES | Fluor vs. The Select Sector | Fluor vs. iShares Global Timber |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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