Correlation Between Fortescue Metals and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both Fortescue Metals and Fair Isaac 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 Fair Isaac 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 Fair Isaac Corp, you can compare the effects of market volatilities on Fortescue Metals and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortescue Metals and Fair Isaac.
Diversification Opportunities for Fortescue Metals and Fair Isaac
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortescue and Fair is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fortescue Metals Group and Fair Isaac Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac Corp 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac Corp has no effect on the direction of Fortescue Metals i.e., Fortescue Metals and Fair Isaac go up and down completely randomly.
Pair Corralation between Fortescue Metals and Fair Isaac
Assuming the 90 days horizon Fortescue Metals Group is expected to generate 0.72 times more return on investment than Fair Isaac. However, Fortescue Metals Group is 1.38 times less risky than Fair Isaac. It trades about 0.15 of its potential returns per unit of risk. Fair Isaac Corp is currently generating about -0.21 per unit of risk. If you would invest 1,106 in Fortescue Metals Group on October 25, 2024 and sell it today you would earn a total of 45.00 from holding Fortescue Metals Group or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortescue Metals Group vs. Fair Isaac Corp
Performance |
| Timeline |
| Fortescue Metals |
| Fair Isaac Corp |
Fortescue Metals and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortescue Metals and Fair Isaac
The main advantage of trading using opposite Fortescue Metals and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortescue Metals position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| Fortescue Metals vs. BHP Group Limited | Fortescue Metals vs. BHP Group Limited | Fortescue Metals vs. Rio Tinto Group | Fortescue Metals vs. Vale SA |
| Fair Isaac vs. Strategic Education | Fair Isaac vs. Benchmark Electronics | Fair Isaac vs. Clean Energy Fuels | Fair Isaac vs. ULTRA CLEAN HLDGS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |