Correlation Between Forth Smart and Union Auction
Can any of the company-specific risk be diversified away by investing in both Forth Smart and Union Auction 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 Forth Smart and Union Auction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forth Smart Service and Union Auction Public, you can compare the effects of market volatilities on Forth Smart and Union Auction 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 Forth Smart with a short position of Union Auction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Smart and Union Auction.
Diversification Opportunities for Forth Smart and Union Auction
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Forth and Union is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Forth Smart Service and Union Auction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Auction Public and Forth Smart 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 Forth Smart Service are associated (or correlated) with Union Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Auction Public has no effect on the direction of Forth Smart i.e., Forth Smart and Union Auction go up and down completely randomly.
Pair Corralation between Forth Smart and Union Auction
Assuming the 90 days trading horizon Forth Smart Service is expected to generate 5.81 times more return on investment than Union Auction. However, Forth Smart is 5.81 times more volatile than Union Auction Public. It trades about 0.29 of its potential returns per unit of risk. Union Auction Public is currently generating about -0.45 per unit of risk. If you would invest 590.00 in Forth Smart Service on August 29, 2024 and sell it today you would earn a total of 260.00 from holding Forth Smart Service or generate 44.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forth Smart Service vs. Union Auction Public
Performance |
| Timeline |
| Forth Smart Service |
| Union Auction Public |
Forth Smart and Union Auction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forth Smart and Union Auction
The main advantage of trading using opposite Forth Smart and Union Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forth Smart position performs unexpectedly, Union Auction 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 Union Auction will offset losses from the drop in Union Auction's long position.| Forth Smart vs. Forth Public | Forth Smart vs. Hana Microelectronics Public | Forth Smart vs. AP Public | Forth Smart vs. Home Product Center |
| Union Auction vs. AP Public | Union Auction vs. Carabao Group Public | Union Auction vs. Forth Smart Service | Union Auction vs. Com7 PCL |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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