Correlation Between Four Leaf and FUNR
Can any of the company-specific risk be diversified away by investing in both Four Leaf and FUNR 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 Four Leaf and FUNR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Leaf Acquisition and FUNR, you can compare the effects of market volatilities on Four Leaf and FUNR 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 Four Leaf with a short position of FUNR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Leaf and FUNR.
Diversification Opportunities for Four Leaf and FUNR
Very good diversification
The 3 months correlation between Four and FUNR is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Four Leaf Acquisition and FUNR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUNR and Four Leaf 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 Four Leaf Acquisition are associated (or correlated) with FUNR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUNR has no effect on the direction of Four Leaf i.e., Four Leaf and FUNR go up and down completely randomly.
Pair Corralation between Four Leaf and FUNR
Given the investment horizon of 90 days Four Leaf is expected to generate 605.84 times less return on investment than FUNR. But when comparing it to its historical volatility, Four Leaf Acquisition is 369.66 times less risky than FUNR. It trades about 0.08 of its potential returns per unit of risk. FUNR is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.02 in FUNR on September 1, 2024 and sell it today you would lose (0.01) from holding FUNR or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Four Leaf Acquisition vs. FUNR
Performance |
| Timeline |
| Four Leaf Acquisition |
| FUNR |
Four Leaf and FUNR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Leaf and FUNR
The main advantage of trading using opposite Four Leaf and FUNR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Leaf position performs unexpectedly, FUNR 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 FUNR will offset losses from the drop in FUNR's long position.| Four Leaf vs. Tencent Music Entertainment | Four Leaf vs. Kite Realty Group | Four Leaf vs. Fast Retailing Co | Four Leaf vs. Universal Music Group |
| FUNR vs. American Leisure Holdings | FUNR vs. Supurva Healthcare Group | FUNR vs. China Health Management | FUNR vs. Embrace Change Acquisition |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |