Correlation Between Fisher Paykel and 88 Energy
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel and 88 Energy 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 Fisher Paykel and 88 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Paykel Healthcare and 88 Energy, you can compare the effects of market volatilities on Fisher Paykel and 88 Energy 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 Fisher Paykel with a short position of 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and 88 Energy.
Diversification Opportunities for Fisher Paykel and 88 Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fisher and 88E is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy and Fisher Paykel 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 Fisher Paykel Healthcare are associated (or correlated) with 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and 88 Energy go up and down completely randomly.
Pair Corralation between Fisher Paykel and 88 Energy
Assuming the 90 days trading horizon Fisher Paykel is expected to generate 70.51 times less return on investment than 88 Energy. But when comparing it to its historical volatility, Fisher Paykel Healthcare is 15.43 times less risky than 88 Energy. It trades about 0.03 of its potential returns per unit of risk. 88 Energy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.10 in 88 Energy on January 10, 2025 and sell it today you would earn a total of 0.00 from holding 88 Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Paykel Healthcare vs. 88 Energy
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| 88 Energy |
Fisher Paykel and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and 88 Energy
The main advantage of trading using opposite Fisher Paykel and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel position performs unexpectedly, 88 Energy 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 88 Energy will offset losses from the drop in 88 Energy's long position.| Fisher Paykel vs. Austco Healthcare | Fisher Paykel vs. Seven West Media | Fisher Paykel vs. Australian United Investment | Fisher Paykel vs. Lendlease Group |
| 88 Energy vs. Infomedia | 88 Energy vs. Skycity Entertainment Group | 88 Energy vs. COAST ENTERTAINMENT HOLDINGS | 88 Energy vs. Fisher Paykel Healthcare |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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