Correlation Between Finance Of and CYIOS
Can any of the company-specific risk be diversified away by investing in both Finance Of and CYIOS 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 Finance Of and CYIOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finance of America and CYIOS, you can compare the effects of market volatilities on Finance Of and CYIOS 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 Finance Of with a short position of CYIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finance Of and CYIOS.
Diversification Opportunities for Finance Of and CYIOS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finance and CYIOS is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Finance of America and CYIOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CYIOS and Finance Of 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 Finance of America are associated (or correlated) with CYIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CYIOS has no effect on the direction of Finance Of i.e., Finance Of and CYIOS go up and down completely randomly.
Pair Corralation between Finance Of and CYIOS
Considering the 90-day investment horizon Finance Of is expected to generate 2.88 times less return on investment than CYIOS. But when comparing it to its historical volatility, Finance of America is 2.01 times less risky than CYIOS. It trades about 0.04 of its potential returns per unit of risk. CYIOS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.15 in CYIOS on August 30, 2024 and sell it today you would lose (0.19) from holding CYIOS or give up 16.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finance of America vs. CYIOS
Performance |
| Timeline |
| Finance of America |
| CYIOS |
Finance Of and CYIOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finance Of and CYIOS
The main advantage of trading using opposite Finance Of and CYIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finance Of position performs unexpectedly, CYIOS 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 CYIOS will offset losses from the drop in CYIOS's long position.| Finance Of vs. Regional Management Corp | Finance Of vs. Orix Corp Ads | Finance Of vs. FirstCash | Finance Of vs. EZCORP Inc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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