Correlation Between FOM Technologies and BankInv Kort

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Can any of the company-specific risk be diversified away by investing in both FOM Technologies and BankInv Kort 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 BankInv Kort 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 BankInv Kort HY, you can compare the effects of market volatilities on FOM Technologies and BankInv Kort 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 BankInv Kort. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and BankInv Kort.

Diversification Opportunities for FOM Technologies and BankInv Kort

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between FOM and BankInv is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and BankInv Kort HY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInv Kort HY 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 BankInv Kort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInv Kort HY has no effect on the direction of FOM Technologies i.e., FOM Technologies and BankInv Kort go up and down completely randomly.

Pair Corralation between FOM Technologies and BankInv Kort

Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the BankInv Kort. In addition to that, FOM Technologies is 14.32 times more volatile than BankInv Kort HY. It trades about -0.09 of its total potential returns per unit of risk. BankInv Kort HY is currently generating about 0.09 per unit of volatility. If you would invest  9,994  in BankInv Kort HY on October 18, 2024 and sell it today you would earn a total of  406.00  from holding BankInv Kort HY or generate 4.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy40.04%
ValuesDaily Returns

FOM Technologies AS  vs.  BankInv Kort HY

 Performance 
       Timeline  
FOM Technologies 

Risk-Adjusted Performance

0 of 100

 
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 weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
BankInv Kort HY 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in BankInv Kort HY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, BankInv Kort is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

FOM Technologies and BankInv Kort Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FOM Technologies and BankInv Kort

The main advantage of trading using opposite FOM Technologies and BankInv Kort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, BankInv Kort 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 BankInv Kort will offset losses from the drop in BankInv Kort's long position.
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The idea behind FOM Technologies AS and BankInv Kort HY 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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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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