Correlation Between Shift4 Payments and FTI Consulting
Can any of the company-specific risk be diversified away by investing in both Shift4 Payments and FTI Consulting 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 Shift4 Payments and FTI Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shift4 Payments and FTI Consulting, you can compare the effects of market volatilities on Shift4 Payments and FTI Consulting 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 Shift4 Payments with a short position of FTI Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift4 Payments and FTI Consulting.
Diversification Opportunities for Shift4 Payments and FTI Consulting
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shift4 and FTI is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and FTI Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTI Consulting and Shift4 Payments 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 Shift4 Payments are associated (or correlated) with FTI Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTI Consulting has no effect on the direction of Shift4 Payments i.e., Shift4 Payments and FTI Consulting go up and down completely randomly.
Pair Corralation between Shift4 Payments and FTI Consulting
Given the investment horizon of 90 days Shift4 Payments is expected to generate 1.47 times more return on investment than FTI Consulting. However, Shift4 Payments is 1.47 times more volatile than FTI Consulting. It trades about 0.05 of its potential returns per unit of risk. FTI Consulting is currently generating about 0.01 per unit of risk. If you would invest 7,490 in Shift4 Payments on August 24, 2024 and sell it today you would earn a total of 3,488 from holding Shift4 Payments or generate 46.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shift4 Payments vs. FTI Consulting
Performance |
| Timeline |
| Shift4 Payments |
| FTI Consulting |
Shift4 Payments and FTI Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shift4 Payments and FTI Consulting
The main advantage of trading using opposite Shift4 Payments and FTI Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift4 Payments position performs unexpectedly, FTI Consulting 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 FTI Consulting will offset losses from the drop in FTI Consulting's long position.| Shift4 Payments vs. SentinelOne | Shift4 Payments vs. Confluent | Shift4 Payments vs. Hashicorp | Shift4 Payments vs. MongoDB |
| FTI Consulting vs. CRA International | FTI Consulting vs. Thermon Group Holdings | FTI Consulting vs. Forrester Research | FTI Consulting vs. Forestar Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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