Correlation Between FOM Technologies and Monsenso
Can any of the company-specific risk be diversified away by investing in both FOM Technologies and Monsenso 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 Monsenso 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 Monsenso AS, you can compare the effects of market volatilities on FOM Technologies and Monsenso 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 Monsenso. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and Monsenso.
Diversification Opportunities for FOM Technologies and Monsenso
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FOM and Monsenso is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and Monsenso AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monsenso 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 Monsenso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monsenso AS has no effect on the direction of FOM Technologies i.e., FOM Technologies and Monsenso go up and down completely randomly.
Pair Corralation between FOM Technologies and Monsenso
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the Monsenso. But the stock apears to be less risky and, when comparing its historical volatility, FOM Technologies AS is 1.87 times less risky than Monsenso. The stock trades about -0.41 of its potential returns per unit of risk. The Monsenso AS is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Monsenso AS on August 25, 2024 and sell it today you would lose (11.00) from holding Monsenso AS or give up 18.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. Monsenso AS
Performance |
| Timeline |
| FOM Technologies |
| Monsenso AS |
FOM Technologies and Monsenso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and Monsenso
The main advantage of trading using opposite FOM Technologies and Monsenso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, Monsenso 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 Monsenso will offset losses from the drop in Monsenso'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 |
| Monsenso vs. FOM Technologies AS | Monsenso vs. Penneo AS | Monsenso vs. BioPorto | Monsenso vs. Shape Robotics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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