Correlation Between FN Factory and Communication System
Can any of the company-specific risk be diversified away by investing in both FN Factory and Communication System 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 FN Factory and Communication System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FN Factory Outlet and Communication System Solution, you can compare the effects of market volatilities on FN Factory and Communication System 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 FN Factory with a short position of Communication System. Check out your portfolio center. Please also check ongoing floating volatility patterns of FN Factory and Communication System.
Diversification Opportunities for FN Factory and Communication System
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FN Factory and Communication is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding FN Factory Outlet and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System and FN Factory 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 FN Factory Outlet are associated (or correlated) with Communication System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication System has no effect on the direction of FN Factory i.e., FN Factory and Communication System go up and down completely randomly.
Pair Corralation between FN Factory and Communication System
Assuming the 90 days horizon FN Factory Outlet is expected to under-perform the Communication System. In addition to that, FN Factory is 1.56 times more volatile than Communication System Solution. It trades about -0.04 of its total potential returns per unit of risk. Communication System Solution is currently generating about 0.01 per unit of volatility. If you would invest 76.00 in Communication System Solution on September 24, 2025 and sell it today you would earn a total of 0.00 from holding Communication System Solution or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FN Factory Outlet vs. Communication System Solution
Performance |
| Timeline |
| FN Factory Outlet |
| Communication System |
FN Factory and Communication System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FN Factory and Communication System
The main advantage of trading using opposite FN Factory and Communication System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FN Factory position performs unexpectedly, Communication System 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 Communication System will offset losses from the drop in Communication System's long position.| FN Factory vs. Chic Republic PCL | FN Factory vs. Pan Asia Footwear | FN Factory vs. World Flex PCL | FN Factory vs. TRV Rubber Products |
| Communication System vs. S P V | Communication System vs. SVOA Public | Communication System vs. Vintcom Technology PCL | Communication System vs. AJ Advance 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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