Correlation Between FUNR and Embrace Change
Can any of the company-specific risk be diversified away by investing in both FUNR and Embrace Change 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 FUNR and Embrace Change into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUNR and Embrace Change Acquisition, you can compare the effects of market volatilities on FUNR and Embrace Change 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 FUNR with a short position of Embrace Change. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUNR and Embrace Change.
Diversification Opportunities for FUNR and Embrace Change
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUNR and Embrace is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding FUNR and Embrace Change Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embrace Change Acqui and FUNR 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 FUNR are associated (or correlated) with Embrace Change. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embrace Change Acqui has no effect on the direction of FUNR i.e., FUNR and Embrace Change go up and down completely randomly.
Pair Corralation between FUNR and Embrace Change
Given the investment horizon of 90 days FUNR is expected to generate 165.36 times more return on investment than Embrace Change. However, FUNR is 165.36 times more volatile than Embrace Change Acquisition. It trades about 0.09 of its potential returns per unit of risk. Embrace Change Acquisition is currently generating about 0.17 per unit of risk. If you would invest 0.07 in FUNR on September 3, 2024 and sell it today you would lose (0.06) from holding FUNR or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUNR vs. Embrace Change Acquisition
Performance |
| Timeline |
| FUNR |
| Embrace Change Acqui |
FUNR and Embrace Change Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUNR and Embrace Change
The main advantage of trading using opposite FUNR and Embrace Change positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUNR position performs unexpectedly, Embrace Change 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 Embrace Change will offset losses from the drop in Embrace Change's long position.| FUNR vs. Manaris Corp | FUNR vs. Green Planet Bio | FUNR vs. Continental Beverage Brands | FUNR vs. Opus Magnum Ameris |
| Embrace Change vs. Absolute Health and | Embrace Change vs. Supurva Healthcare Group | Embrace Change vs. TransAKT | Embrace Change vs. HUMANA INC |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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