Correlation Between FSA and Tamawood
Can any of the company-specific risk be diversified away by investing in both FSA and Tamawood 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 FSA and Tamawood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FSA Group and Tamawood, you can compare the effects of market volatilities on FSA and Tamawood 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 FSA with a short position of Tamawood. Check out your portfolio center. Please also check ongoing floating volatility patterns of FSA and Tamawood.
Diversification Opportunities for FSA and Tamawood
Very good diversification
The 3 months correlation between FSA and Tamawood is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FSA Group and Tamawood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamawood and FSA 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 FSA Group are associated (or correlated) with Tamawood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamawood has no effect on the direction of FSA i.e., FSA and Tamawood go up and down completely randomly.
Pair Corralation between FSA and Tamawood
Assuming the 90 days trading horizon FSA Group is expected to under-perform the Tamawood. But the stock apears to be less risky and, when comparing its historical volatility, FSA Group is 1.9 times less risky than Tamawood. The stock trades about -0.02 of its potential returns per unit of risk. The Tamawood is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 228.00 in Tamawood on August 29, 2024 and sell it today you would earn a total of 44.00 from holding Tamawood or generate 19.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
FSA Group vs. Tamawood
Performance |
| Timeline |
| FSA Group |
| Tamawood |
FSA and Tamawood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FSA and Tamawood
The main advantage of trading using opposite FSA and Tamawood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FSA position performs unexpectedly, Tamawood 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 Tamawood will offset losses from the drop in Tamawood's long position.| FSA vs. MFF Capital Investments | FSA vs. REGAL ASIAN INVESTMENTS | FSA vs. Stelar Metals | FSA vs. Sky Metals |
| Tamawood vs. Australian Unity Office | Tamawood vs. Aeon Metals | Tamawood vs. Hotel Property Investments | Tamawood vs. Macquarie Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |