Correlation Between Finexia Financial and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Advanced Braking 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 Finexia Financial and Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finexia Financial Group and Advanced Braking Technology, you can compare the effects of market volatilities on Finexia Financial and Advanced Braking 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 Finexia Financial with a short position of Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Advanced Braking.
Diversification Opportunities for Finexia Financial and Advanced Braking
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finexia and Advanced is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec and Finexia Financial 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 Finexia Financial Group are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Finexia Financial i.e., Finexia Financial and Advanced Braking go up and down completely randomly.
Pair Corralation between Finexia Financial and Advanced Braking
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 1.4 times more return on investment than Advanced Braking. However, Finexia Financial is 1.4 times more volatile than Advanced Braking Technology. It trades about 0.27 of its potential returns per unit of risk. Advanced Braking Technology is currently generating about 0.28 per unit of risk. If you would invest 26.00 in Finexia Financial Group on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Finexia Financial Group or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finexia Financial Group vs. Advanced Braking Technology
Performance |
| Timeline |
| Finexia Financial |
| Advanced Braking Tec |
Finexia Financial and Advanced Braking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Advanced Braking
The main advantage of trading using opposite Finexia Financial and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Advanced Braking 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 Braking will offset losses from the drop in Advanced Braking's long position.| Finexia Financial vs. Renascor Resources | Finexia Financial vs. Venus Metals | Finexia Financial vs. Havilah Resources | Finexia Financial vs. Asara Resources |
| Advanced Braking vs. Home Consortium | Advanced Braking vs. Air New Zealand | Advanced Braking vs. Duxton Broadacre Farms | Advanced Braking vs. Finexia Financial Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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