Correlation Between Ferrexpo PLC and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Bloomsbury Publishing 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 Ferrexpo PLC and Bloomsbury Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Bloomsbury Publishing Plc, you can compare the effects of market volatilities on Ferrexpo PLC and Bloomsbury Publishing 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 Ferrexpo PLC with a short position of Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Bloomsbury Publishing.
Diversification Opportunities for Ferrexpo PLC and Bloomsbury Publishing
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ferrexpo and Bloomsbury is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Bloomsbury Publishing
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 3.48 times more return on investment than Bloomsbury Publishing. However, Ferrexpo PLC is 3.48 times more volatile than Bloomsbury Publishing Plc. It trades about 0.08 of its potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about -0.04 per unit of risk. If you would invest 6,780 in Ferrexpo PLC on November 7, 2024 and sell it today you would earn a total of 1,220 from holding Ferrexpo PLC or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. Bloomsbury Publishing Plc
Performance |
| Timeline |
| Ferrexpo PLC |
| Bloomsbury Publishing Plc |
Ferrexpo PLC and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Bloomsbury Publishing
The main advantage of trading using opposite Ferrexpo PLC and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing's long position.| Ferrexpo PLC vs. BE Semiconductor Industries | Ferrexpo PLC vs. Dalata Hotel Group | Ferrexpo PLC vs. Naked Wines plc | Ferrexpo PLC vs. Taiwan Semiconductor Manufacturing |
| Bloomsbury Publishing vs. Broadcom | Bloomsbury Publishing vs. Norman Broadbent Plc | Bloomsbury Publishing vs. Gaztransport et Technigaz | Bloomsbury Publishing vs. Geely Automobile Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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