Correlation Between Fortescue Metals and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both Fortescue Metals and MAVEN WIRELESS 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 Fortescue Metals and MAVEN WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortescue Metals Group and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on Fortescue Metals and MAVEN WIRELESS 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 Fortescue Metals with a short position of MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortescue Metals and MAVEN WIRELESS.
Diversification Opportunities for Fortescue Metals and MAVEN WIRELESS
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fortescue and MAVEN is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fortescue Metals Group and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN and Fortescue Metals 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 Fortescue Metals Group are associated (or correlated) with MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of Fortescue Metals i.e., Fortescue Metals and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between Fortescue Metals and MAVEN WIRELESS
Assuming the 90 days horizon Fortescue Metals Group is expected to under-perform the MAVEN WIRELESS. But the stock apears to be less risky and, when comparing its historical volatility, Fortescue Metals Group is 2.0 times less risky than MAVEN WIRELESS. The stock trades about -0.44 of its potential returns per unit of risk. The MAVEN WIRELESS SWEDEN is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 74.00 in MAVEN WIRELESS SWEDEN on October 12, 2024 and sell it today you would earn a total of 12.00 from holding MAVEN WIRELESS SWEDEN or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortescue Metals Group vs. MAVEN WIRELESS SWEDEN
Performance |
| Timeline |
| Fortescue Metals |
| MAVEN WIRELESS SWEDEN |
Fortescue Metals and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortescue Metals and MAVEN WIRELESS
The main advantage of trading using opposite Fortescue Metals and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortescue Metals position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.| Fortescue Metals vs. Sinopec Shanghai Petrochemical | Fortescue Metals vs. Mitsui Chemicals | Fortescue Metals vs. EBRO FOODS | Fortescue Metals vs. X FAB Silicon Foundries |
| MAVEN WIRELESS vs. NEW MILLENNIUM IRON | MAVEN WIRELESS vs. STEEL DYNAMICS | MAVEN WIRELESS vs. Strategic Education | MAVEN WIRELESS vs. DeVry Education 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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