Correlation Between Ferrexpo PLC and Investment
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Investment 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 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and The Investment, you can compare the effects of market volatilities on Ferrexpo PLC and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Investment.
Diversification Opportunities for Ferrexpo PLC and Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ferrexpo and Investment is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Investment go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Investment
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 4.99 times more return on investment than Investment. However, Ferrexpo PLC is 4.99 times more volatile than The Investment. It trades about 0.02 of its potential returns per unit of risk. The Investment is currently generating about 0.04 per unit of risk. If you would invest 9,270 in Ferrexpo PLC on September 4, 2024 and sell it today you would lose (270.00) from holding Ferrexpo PLC or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Ferrexpo PLC vs. The Investment
Performance |
| Timeline |
| Ferrexpo PLC |
| Investment |
Ferrexpo PLC and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Investment
The main advantage of trading using opposite Ferrexpo PLC and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Ferrexpo PLC vs. Scandic Hotels Group | Ferrexpo PLC vs. Creo Medical Group | Ferrexpo PLC vs. Advanced Medical Solutions | Ferrexpo PLC vs. Panther Metals PLC |
| Investment vs. Deltex Medical Group | Investment vs. Wyndham Hotels Resorts | Investment vs. InterContinental Hotels Group | Investment vs. United States Steel |
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.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |