Correlation Between Ferro SA and Skyline Investment
Can any of the company-specific risk be diversified away by investing in both Ferro SA and Skyline Investment 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 Ferro SA and Skyline Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferro SA and Skyline Investment SA, you can compare the effects of market volatilities on Ferro SA and Skyline Investment 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 Ferro SA with a short position of Skyline Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferro SA and Skyline Investment.
Diversification Opportunities for Ferro SA and Skyline Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ferro and Skyline is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ferro SA and Skyline Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyline Investment and Ferro SA 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 Ferro SA are associated (or correlated) with Skyline Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyline Investment has no effect on the direction of Ferro SA i.e., Ferro SA and Skyline Investment go up and down completely randomly.
Pair Corralation between Ferro SA and Skyline Investment
Assuming the 90 days trading horizon Ferro SA is expected to generate 0.74 times more return on investment than Skyline Investment. However, Ferro SA is 1.35 times less risky than Skyline Investment. It trades about 0.05 of its potential returns per unit of risk. Skyline Investment SA is currently generating about -0.02 per unit of risk. If you would invest 2,847 in Ferro SA on September 2, 2024 and sell it today you would earn a total of 603.00 from holding Ferro SA or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferro SA vs. Skyline Investment SA
Performance |
| Timeline |
| Ferro SA |
| Skyline Investment |
Ferro SA and Skyline Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferro SA and Skyline Investment
The main advantage of trading using opposite Ferro SA and Skyline Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferro SA position performs unexpectedly, Skyline Investment 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 Skyline Investment will offset losses from the drop in Skyline Investment's long position.| Ferro SA vs. Echo Investment SA | Ferro SA vs. Esotiq Henderson SA | Ferro SA vs. Asseco South Eastern | Ferro SA vs. Vercom SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |