Correlation Between FSA and WiseTech Global
Can any of the company-specific risk be diversified away by investing in both FSA and WiseTech Global 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 WiseTech Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FSA Group and WiseTech Global Limited, you can compare the effects of market volatilities on FSA and WiseTech Global 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 WiseTech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FSA and WiseTech Global.
Diversification Opportunities for FSA and WiseTech Global
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between FSA and WiseTech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding FSA Group and WiseTech Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseTech Global 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 WiseTech Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseTech Global has no effect on the direction of FSA i.e., FSA and WiseTech Global go up and down completely randomly.
Pair Corralation between FSA and WiseTech Global
Assuming the 90 days trading horizon FSA Group is expected to under-perform the WiseTech Global. But the stock apears to be less risky and, when comparing its historical volatility, FSA Group is 1.99 times less risky than WiseTech Global. The stock trades about -0.06 of its potential returns per unit of risk. The WiseTech Global Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,859 in WiseTech Global Limited on August 29, 2024 and sell it today you would earn a total of 581.00 from holding WiseTech Global Limited or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
FSA Group vs. WiseTech Global Limited
Performance |
| Timeline |
| FSA Group |
| WiseTech Global |
FSA and WiseTech Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FSA and WiseTech Global
The main advantage of trading using opposite FSA and WiseTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FSA position performs unexpectedly, WiseTech Global 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 WiseTech Global will offset losses from the drop in WiseTech Global's long position.| FSA vs. MFF Capital Investments | FSA vs. REGAL ASIAN INVESTMENTS | FSA vs. Stelar Metals | FSA vs. Sky Metals |
| WiseTech Global vs. PVW Resources | WiseTech Global vs. Woolworths | WiseTech Global vs. Wesfarmers | WiseTech Global vs. Coles 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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