Correlation Between Focusrite Plc and Callaway Golf
Can any of the company-specific risk be diversified away by investing in both Focusrite Plc and Callaway Golf 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 Focusrite Plc and Callaway Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focusrite plc and Callaway Golf, you can compare the effects of market volatilities on Focusrite Plc and Callaway Golf 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 Focusrite Plc with a short position of Callaway Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focusrite Plc and Callaway Golf.
Diversification Opportunities for Focusrite Plc and Callaway Golf
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Focusrite and Callaway is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Focusrite plc and Callaway Golf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callaway Golf and Focusrite Plc 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 Focusrite plc are associated (or correlated) with Callaway Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callaway Golf has no effect on the direction of Focusrite Plc i.e., Focusrite Plc and Callaway Golf go up and down completely randomly.
Pair Corralation between Focusrite Plc and Callaway Golf
Assuming the 90 days horizon Focusrite plc is expected to generate 0.75 times more return on investment than Callaway Golf. However, Focusrite plc is 1.33 times less risky than Callaway Golf. It trades about -0.06 of its potential returns per unit of risk. Callaway Golf is currently generating about -0.05 per unit of risk. If you would invest 782.00 in Focusrite plc on September 12, 2024 and sell it today you would lose (415.00) from holding Focusrite plc or give up 53.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Focusrite plc vs. Callaway Golf
Performance |
| Timeline |
| Focusrite plc |
| Callaway Golf |
Focusrite Plc and Callaway Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focusrite Plc and Callaway Golf
The main advantage of trading using opposite Focusrite Plc and Callaway Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focusrite Plc position performs unexpectedly, Callaway Golf 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 Callaway Golf will offset losses from the drop in Callaway Golf's long position.| Focusrite Plc vs. Callaway Golf | Focusrite Plc vs. Acushnet Holdings Corp | Focusrite Plc vs. Planet Fitness | Focusrite Plc vs. Bowlero Corp |
| Callaway Golf vs. Bowlero Corp | Callaway Golf vs. Johnson Outdoors | Callaway Golf vs. YETI Holdings | Callaway Golf vs. Xponential Fitness |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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