Correlation Between Ferrexpo PLC and Symphony Environmental
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Symphony Environmental 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 Symphony Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Symphony Environmental Technologies, you can compare the effects of market volatilities on Ferrexpo PLC and Symphony Environmental 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 Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Symphony Environmental.
Diversification Opportunities for Ferrexpo PLC and Symphony Environmental
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ferrexpo and Symphony is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Symphony Environmental go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Symphony Environmental
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.84 times more return on investment than Symphony Environmental. However, Ferrexpo PLC is 1.84 times more volatile than Symphony Environmental Technologies. It trades about 0.24 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about -0.07 per unit of risk. If you would invest 8,200 in Ferrexpo PLC on September 12, 2024 and sell it today you would earn a total of 2,700 from holding Ferrexpo PLC or generate 32.93% 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. Symphony Environmental Technol
Performance |
| Timeline |
| Ferrexpo PLC |
| Symphony Environmental |
Ferrexpo PLC and Symphony Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Symphony Environmental
The main advantage of trading using opposite Ferrexpo PLC and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Symphony Environmental 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.| Ferrexpo PLC vs. Beeks Trading | Ferrexpo PLC vs. Wheaton Precious Metals | Ferrexpo PLC vs. Bisichi Mining PLC | Ferrexpo PLC vs. CNH Industrial NV |
| Symphony Environmental vs. Givaudan SA | Symphony Environmental vs. Antofagasta PLC | Symphony Environmental vs. Ferrexpo PLC | Symphony Environmental vs. Atalaya Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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