Correlation Between Finexia Financial and Dug Technology
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Dug Technology 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 Dug Technology 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 Dug Technology, you can compare the effects of market volatilities on Finexia Financial and Dug Technology 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 Dug Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Dug Technology.
Diversification Opportunities for Finexia Financial and Dug Technology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Finexia and Dug is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug Technology 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 Dug Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology has no effect on the direction of Finexia Financial i.e., Finexia Financial and Dug Technology go up and down completely randomly.
Pair Corralation between Finexia Financial and Dug Technology
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 1.33 times more return on investment than Dug Technology. However, Finexia Financial is 1.33 times more volatile than Dug Technology. It trades about 0.07 of its potential returns per unit of risk. Dug Technology is currently generating about -0.1 per unit of risk. If you would invest 25.00 in Finexia Financial Group on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Finexia Financial Group or generate 28.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finexia Financial Group vs. Dug Technology
Performance |
| Timeline |
| Finexia Financial |
| Dug Technology |
Finexia Financial and Dug Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Dug Technology
The main advantage of trading using opposite Finexia Financial and Dug Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Dug Technology 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 Dug Technology will offset losses from the drop in Dug Technology's long position.| Finexia Financial vs. Qbe Insurance Group | Finexia Financial vs. Ora Banda Mining | Finexia Financial vs. Wt Financial Group | Finexia Financial vs. Prime Financial Group |
| Dug Technology vs. Westpac Banking | Dug Technology vs. Ecofibre | Dug Technology vs. iShares Global Healthcare | Dug Technology vs. Adriatic Metals Plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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