Correlation Between Futura Medical and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both Futura Medical and CAP LEASE 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 Futura Medical and CAP LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futura Medical and CAP LEASE AVIATION, you can compare the effects of market volatilities on Futura Medical and CAP LEASE 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 Futura Medical with a short position of CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and CAP LEASE.
Diversification Opportunities for Futura Medical and CAP LEASE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futura and CAP is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION and Futura Medical 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 Futura Medical are associated (or correlated) with CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Futura Medical i.e., Futura Medical and CAP LEASE go up and down completely randomly.
Pair Corralation between Futura Medical and CAP LEASE
Assuming the 90 days trading horizon Futura Medical is expected to under-perform the CAP LEASE. In addition to that, Futura Medical is 2.11 times more volatile than CAP LEASE AVIATION. It trades about -0.29 of its total potential returns per unit of risk. CAP LEASE AVIATION is currently generating about 0.17 per unit of volatility. If you would invest 50.00 in CAP LEASE AVIATION on November 28, 2024 and sell it today you would earn a total of 9.00 from holding CAP LEASE AVIATION or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futura Medical vs. CAP LEASE AVIATION
Performance |
| Timeline |
| Futura Medical |
| CAP LEASE AVIATION |
Futura Medical and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and CAP LEASE
The main advantage of trading using opposite Futura Medical and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.| Futura Medical vs. Alfa Financial Software | Futura Medical vs. Grieg Seafood | Futura Medical vs. Vitec Software Group | Futura Medical vs. Axfood AB |
| CAP LEASE vs. Arrow Electronics | CAP LEASE vs. Solstad Offshore ASA | CAP LEASE vs. Ruffer Investment | CAP LEASE vs. Kinnevik Investment AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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