Correlation Between Fisher Paykel and Technology One
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel and Technology One 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 Technology One 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 Technology One, you can compare the effects of market volatilities on Fisher Paykel and Technology One 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 Technology One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and Technology One.
Diversification Opportunities for Fisher Paykel and Technology One
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fisher and Technology is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and Technology One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology One 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 Technology One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology One has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and Technology One go up and down completely randomly.
Pair Corralation between Fisher Paykel and Technology One
Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to generate 1.07 times more return on investment than Technology One. However, Fisher Paykel is 1.07 times more volatile than Technology One. It trades about 0.13 of its potential returns per unit of risk. Technology One is currently generating about -0.02 per unit of risk. If you would invest 3,336 in Fisher Paykel Healthcare on October 14, 2024 and sell it today you would earn a total of 94.00 from holding Fisher Paykel Healthcare or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Paykel Healthcare vs. Technology One
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| Technology One |
Fisher Paykel and Technology One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and Technology One
The main advantage of trading using opposite Fisher Paykel and Technology One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel position performs unexpectedly, Technology One 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 Technology One will offset losses from the drop in Technology One's long position.| Fisher Paykel vs. Carnegie Clean Energy | Fisher Paykel vs. Cleanaway Waste Management | Fisher Paykel vs. Sandon Capital Investments | Fisher Paykel vs. Flagship Investments |
| Technology One vs. Step One Clothing | Technology One vs. Fisher Paykel Healthcare | Technology One vs. Legacy Iron Ore | Technology One vs. Queste Communications |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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