Correlation Between Fisher Paykel and Future Generation
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel and Future Generation 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 Future Generation 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 Future Generation Australia, you can compare the effects of market volatilities on Fisher Paykel and Future Generation 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 Future Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and Future Generation.
Diversification Opportunities for Fisher Paykel and Future Generation
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fisher and Future is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and Future Generation Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Generation 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 Future Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Generation has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and Future Generation go up and down completely randomly.
Pair Corralation between Fisher Paykel and Future Generation
Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to generate 1.59 times more return on investment than Future Generation. However, Fisher Paykel is 1.59 times more volatile than Future Generation Australia. It trades about 0.12 of its potential returns per unit of risk. Future Generation Australia is currently generating about 0.1 per unit of risk. If you would invest 2,191 in Fisher Paykel Healthcare on September 4, 2024 and sell it today you would earn a total of 1,282 from holding Fisher Paykel Healthcare or generate 58.51% 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. Future Generation Australia
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| Future Generation |
Fisher Paykel and Future Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and Future Generation
The main advantage of trading using opposite Fisher Paykel and Future Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel position performs unexpectedly, Future Generation 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 Future Generation will offset losses from the drop in Future Generation's long position.| Fisher Paykel vs. Energy Resources | Fisher Paykel vs. 88 Energy | Fisher Paykel vs. Amani Gold | Fisher Paykel vs. A1 Investments Resources |
| Future Generation vs. Fisher Paykel Healthcare | Future Generation vs. Regal Investment | Future Generation vs. A1 Investments Resources | Future Generation vs. Hotel Property Investments |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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