Correlation Between Finexia Financial and Pact Group
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Pact Group 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 Pact Group 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 Pact Group Holdings, you can compare the effects of market volatilities on Finexia Financial and Pact Group 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 Pact Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Pact Group.
Diversification Opportunities for Finexia Financial and Pact Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finexia and Pact is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Pact Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pact Group Holdings 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 Pact Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pact Group Holdings has no effect on the direction of Finexia Financial i.e., Finexia Financial and Pact Group go up and down completely randomly.
Pair Corralation between Finexia Financial and Pact Group
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 2.21 times more return on investment than Pact Group. However, Finexia Financial is 2.21 times more volatile than Pact Group Holdings. It trades about 0.32 of its potential returns per unit of risk. Pact Group Holdings is currently generating about -0.11 per unit of risk. If you would invest 26.00 in Finexia Financial Group on August 25, 2024 and sell it today you would earn a total of 6.00 from holding Finexia Financial Group or generate 23.08% 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. Pact Group Holdings
Performance |
| Timeline |
| Finexia Financial |
| Pact Group Holdings |
Finexia Financial and Pact Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Pact Group
The main advantage of trading using opposite Finexia Financial and Pact Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Pact Group 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 Pact Group will offset losses from the drop in Pact Group's long position.| Finexia Financial vs. Stelar Metals | Finexia Financial vs. Ainsworth Game Technology | Finexia Financial vs. Green Technology Metals | Finexia Financial vs. Viva Leisure |
| Pact Group vs. Kip McGrath Education | Pact Group vs. Viva Leisure | Pact Group vs. Carnegie Clean Energy | Pact Group vs. Lendlease 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |