Correlation Between Finexia Financial and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Viva Leisure 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 Viva Leisure 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 Viva Leisure, you can compare the effects of market volatilities on Finexia Financial and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Viva Leisure.
Diversification Opportunities for Finexia Financial and Viva Leisure
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Finexia and Viva is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Finexia Financial i.e., Finexia Financial and Viva Leisure go up and down completely randomly.
Pair Corralation between Finexia Financial and Viva Leisure
Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 1.29 times more return on investment than Viva Leisure. However, Finexia Financial is 1.29 times more volatile than Viva Leisure. It trades about 0.26 of its potential returns per unit of risk. Viva Leisure is currently generating about 0.06 per unit of risk. If you would invest 26.00 in Finexia Financial Group on August 29, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finexia Financial Group vs. Viva Leisure
Performance |
| Timeline |
| Finexia Financial |
| Viva Leisure |
Finexia Financial and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Viva Leisure
The main advantage of trading using opposite Finexia Financial and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure's long position.| Finexia Financial vs. Champion Iron | Finexia Financial vs. Ridley | Finexia Financial vs. Peel Mining | Finexia Financial vs. Australian Dairy Farms |
| Viva Leisure vs. Legacy Iron Ore | Viva Leisure vs. Sky Metals | Viva Leisure vs. Red Hill Iron | Viva Leisure vs. Black Rock Mining |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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