Correlation Between FOM Technologies and LUXOR-B
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By analyzing existing cross correlation between FOM Technologies AS and Investeringsselskabet Luxor AS, you can compare the effects of market volatilities on FOM Technologies and LUXOR-B 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 LUXOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and LUXOR-B.
Diversification Opportunities for FOM Technologies and LUXOR-B
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FOM and LUXOR-B is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and Investeringsselskabet Luxor AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsselskabet 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 LUXOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsselskabet has no effect on the direction of FOM Technologies i.e., FOM Technologies and LUXOR-B go up and down completely randomly.
Pair Corralation between FOM Technologies and LUXOR-B
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the LUXOR-B. In addition to that, FOM Technologies is 1.69 times more volatile than Investeringsselskabet Luxor AS. It trades about -0.08 of its total potential returns per unit of risk. Investeringsselskabet Luxor AS is currently generating about -0.03 per unit of volatility. If you would invest 82,057 in Investeringsselskabet Luxor AS on September 13, 2024 and sell it today you would lose (26,057) from holding Investeringsselskabet Luxor AS or give up 31.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. Investeringsselskabet Luxor AS
Performance |
| Timeline |
| FOM Technologies |
| Investeringsselskabet |
FOM Technologies and LUXOR-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and LUXOR-B
The main advantage of trading using opposite FOM Technologies and LUXOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, LUXOR-B 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 LUXOR-B will offset losses from the drop in LUXOR-B's long position.| FOM Technologies vs. Vestas Wind Systems | FOM Technologies vs. Brd Klee AS | FOM Technologies vs. Hydract 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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