Correlation Between Finexia Financial and Cromwell Property
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Cromwell Property 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 Cromwell Property 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 Cromwell Property Group, you can compare the effects of market volatilities on Finexia Financial and Cromwell Property 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 Cromwell Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Cromwell Property.
Diversification Opportunities for Finexia Financial and Cromwell Property
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finexia and Cromwell is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property 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 Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of Finexia Financial i.e., Finexia Financial and Cromwell Property go up and down completely randomly.
Pair Corralation between Finexia Financial and Cromwell Property
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 1.7 times more return on investment than Cromwell Property. However, Finexia Financial is 1.7 times more volatile than Cromwell Property Group. It trades about 0.04 of its potential returns per unit of risk. Cromwell Property Group is currently generating about -0.02 per unit of risk. If you would invest 23.00 in Finexia Financial Group on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Finexia Financial Group or generate 39.13% 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. Cromwell Property Group
Performance |
| Timeline |
| Finexia Financial |
| Cromwell Property |
Finexia Financial and Cromwell Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Cromwell Property
The main advantage of trading using opposite Finexia Financial and Cromwell Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Cromwell Property 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 Cromwell Property will offset losses from the drop in Cromwell Property's long position.| Finexia Financial vs. Aneka Tambang Tbk | Finexia Financial vs. Commonwealth Bank | Finexia Financial vs. BHP Group Limited | Finexia Financial vs. Rio Tinto |
| Cromwell Property vs. Perseus Mining | Cromwell Property vs. Finexia Financial Group | Cromwell Property vs. EVE Health Group | Cromwell Property vs. EP 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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