Correlation Between Fisher Paykel and ASX
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel and ASX 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 ASX 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 ASX, you can compare the effects of market volatilities on Fisher Paykel and ASX 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 ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and ASX.
Diversification Opportunities for Fisher Paykel and ASX
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fisher and ASX is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and ASX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX 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 ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and ASX go up and down completely randomly.
Pair Corralation between Fisher Paykel and ASX
Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to generate 1.33 times more return on investment than ASX. However, Fisher Paykel is 1.33 times more volatile than ASX. It trades about 0.07 of its potential returns per unit of risk. ASX is currently generating about 0.02 per unit of risk. If you would invest 2,031 in Fisher Paykel Healthcare on September 12, 2024 and sell it today you would earn a total of 1,324 from holding Fisher Paykel Healthcare or generate 65.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Paykel Healthcare vs. ASX
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| ASX |
Fisher Paykel and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and ASX
The main advantage of trading using opposite Fisher Paykel and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| Fisher Paykel vs. CSL | Fisher Paykel vs. Tamawood | Fisher Paykel vs. Cochlear | Fisher Paykel vs. Rea Group |
| ASX vs. Bank of Queensland | ASX vs. Queste Communications | ASX vs. MetalsGrove Mining | ASX vs. Magellan Financial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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