Correlation Between FOM Technologies and PF Atlantic

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Can any of the company-specific risk be diversified away by investing in both FOM Technologies and PF Atlantic 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 FOM Technologies and PF Atlantic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOM Technologies AS and PF Atlantic Petroleum, you can compare the effects of market volatilities on FOM Technologies and PF Atlantic 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 FOM Technologies with a short position of PF Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and PF Atlantic.

Diversification Opportunities for FOM Technologies and PF Atlantic

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between FOM and ATLA-DKK is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and PF Atlantic Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PF Atlantic Petroleum and FOM Technologies 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 FOM Technologies AS are associated (or correlated) with PF Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PF Atlantic Petroleum has no effect on the direction of FOM Technologies i.e., FOM Technologies and PF Atlantic go up and down completely randomly.

Pair Corralation between FOM Technologies and PF Atlantic

Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the PF Atlantic. But the stock apears to be less risky and, when comparing its historical volatility, FOM Technologies AS is 1.03 times less risky than PF Atlantic. The stock trades about -0.24 of its potential returns per unit of risk. The PF Atlantic Petroleum is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  230.00  in PF Atlantic Petroleum on September 13, 2024 and sell it today you would lose (41.00) from holding PF Atlantic Petroleum or give up 17.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

FOM Technologies AS  vs.  PF Atlantic Petroleum

 Performance 
       Timeline  
FOM Technologies 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days FOM Technologies AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
PF Atlantic Petroleum 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PF Atlantic Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

FOM Technologies and PF Atlantic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FOM Technologies and PF Atlantic

The main advantage of trading using opposite FOM Technologies and PF Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, PF Atlantic 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 PF Atlantic will offset losses from the drop in PF Atlantic's long position.
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The idea behind FOM Technologies AS and PF Atlantic Petroleum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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