Correlation Between FOM Technologies and Hove AS
Can any of the company-specific risk be diversified away by investing in both FOM Technologies and Hove AS 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 Hove AS 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 Hove AS, you can compare the effects of market volatilities on FOM Technologies and Hove AS 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 Hove AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and Hove AS.
Diversification Opportunities for FOM Technologies and Hove AS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FOM and Hove is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and Hove AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hove AS 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 Hove AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hove AS has no effect on the direction of FOM Technologies i.e., FOM Technologies and Hove AS go up and down completely randomly.
Pair Corralation between FOM Technologies and Hove AS
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the Hove AS. In addition to that, FOM Technologies is 1.59 times more volatile than Hove AS. It trades about -0.4 of its total potential returns per unit of risk. Hove AS is currently generating about -0.14 per unit of volatility. If you would invest 359.00 in Hove AS on August 30, 2024 and sell it today you would lose (29.00) from holding Hove AS or give up 8.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
FOM Technologies AS vs. Hove AS
Performance |
| Timeline |
| FOM Technologies |
| Hove AS |
FOM Technologies and Hove AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and Hove AS
The main advantage of trading using opposite FOM Technologies and Hove AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, Hove AS 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 Hove AS will offset losses from the drop in Hove AS's long position.| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell AS |
| Hove AS vs. Scandinavian Medical Solutions | Hove AS vs. FOM Technologies AS | Hove AS vs. Shape Robotics AS | Hove AS vs. Dataproces Group AS |
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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