Correlation Between Finexia Financial and Vulcan Steel
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Vulcan Steel 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 Vulcan Steel 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 Vulcan Steel, you can compare the effects of market volatilities on Finexia Financial and Vulcan Steel 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 Vulcan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Vulcan Steel.
Diversification Opportunities for Finexia Financial and Vulcan Steel
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finexia and Vulcan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Vulcan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Steel 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 Vulcan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Steel has no effect on the direction of Finexia Financial i.e., Finexia Financial and Vulcan Steel go up and down completely randomly.
Pair Corralation between Finexia Financial and Vulcan Steel
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 0.87 times more return on investment than Vulcan Steel. However, Finexia Financial Group is 1.15 times less risky than Vulcan Steel. It trades about 0.05 of its potential returns per unit of risk. Vulcan Steel is currently generating about -0.04 per unit of risk. If you would invest 27.00 in Finexia Financial Group on November 1, 2024 and sell it today you would earn a total of 2.00 from holding Finexia Financial Group or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Finexia Financial Group vs. Vulcan Steel
Performance |
| Timeline |
| Finexia Financial |
| Vulcan Steel |
Finexia Financial and Vulcan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Vulcan Steel
The main advantage of trading using opposite Finexia Financial and Vulcan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Vulcan Steel 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 Vulcan Steel will offset losses from the drop in Vulcan Steel's long position.| Finexia Financial vs. Zoom2u Technologies | Finexia Financial vs. WiseTech Global Limited | Finexia Financial vs. Macquarie Technology Group | Finexia Financial vs. Duxton Broadacre Farms |
| Vulcan Steel vs. Home Consortium | Vulcan Steel vs. Carnegie Clean Energy | Vulcan Steel vs. Aspire Mining | Vulcan Steel vs. Sun Silver Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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