Correlation Between Fisher Paykel and Red Hill
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel and Red Hill 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 Red Hill 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 Red Hill Iron, you can compare the effects of market volatilities on Fisher Paykel and Red Hill 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 Red Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and Red Hill.
Diversification Opportunities for Fisher Paykel and Red Hill
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fisher and Red is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and Red Hill Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Hill Iron 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 Red Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Hill Iron has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and Red Hill go up and down completely randomly.
Pair Corralation between Fisher Paykel and Red Hill
Assuming the 90 days trading horizon Fisher Paykel is expected to generate 9.8 times less return on investment than Red Hill. But when comparing it to its historical volatility, Fisher Paykel Healthcare is 1.66 times less risky than Red Hill. It trades about 0.03 of its potential returns per unit of risk. Red Hill Iron is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 395.00 in Red Hill Iron on August 28, 2024 and sell it today you would earn a total of 43.00 from holding Red Hill Iron or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Paykel Healthcare vs. Red Hill Iron
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| Red Hill Iron |
Fisher Paykel and Red Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and Red Hill
The main advantage of trading using opposite Fisher Paykel and Red Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel position performs unexpectedly, Red Hill 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 Red Hill will offset losses from the drop in Red Hill's long position.| Fisher Paykel vs. Red Hill Iron | Fisher Paykel vs. Black Rock Mining | Fisher Paykel vs. Legacy Iron Ore | Fisher Paykel vs. Ironbark Capital |
| Red Hill vs. Northern Star Resources | Red Hill vs. Evolution Mining | Red Hill vs. Bluescope Steel | Red Hill vs. Sandfire Resources NL |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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