Correlation Between FIH MOBILE and ANGLO ASIAN
Can any of the company-specific risk be diversified away by investing in both FIH MOBILE and ANGLO ASIAN 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 FIH MOBILE and ANGLO ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIH MOBILE and ANGLO ASIAN MINING, you can compare the effects of market volatilities on FIH MOBILE and ANGLO ASIAN 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 FIH MOBILE with a short position of ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIH MOBILE and ANGLO ASIAN.
Diversification Opportunities for FIH MOBILE and ANGLO ASIAN
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIH and ANGLO is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding FIH MOBILE and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING and FIH MOBILE 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 FIH MOBILE are associated (or correlated) with ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of FIH MOBILE i.e., FIH MOBILE and ANGLO ASIAN go up and down completely randomly.
Pair Corralation between FIH MOBILE and ANGLO ASIAN
Assuming the 90 days trading horizon FIH MOBILE is expected to generate 0.95 times more return on investment than ANGLO ASIAN. However, FIH MOBILE is 1.05 times less risky than ANGLO ASIAN. It trades about 0.25 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about -0.04 per unit of risk. If you would invest 10.00 in FIH MOBILE on October 23, 2024 and sell it today you would earn a total of 1.00 from holding FIH MOBILE or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIH MOBILE vs. ANGLO ASIAN MINING
Performance |
| Timeline |
| FIH MOBILE |
| ANGLO ASIAN MINING |
FIH MOBILE and ANGLO ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIH MOBILE and ANGLO ASIAN
The main advantage of trading using opposite FIH MOBILE and ANGLO ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH MOBILE position performs unexpectedly, ANGLO ASIAN 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 ANGLO ASIAN will offset losses from the drop in ANGLO ASIAN's long position.The idea behind FIH MOBILE and ANGLO ASIAN MINING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |