Correlation Between FD Technologies and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both FD Technologies and Cairn Homes 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 FD Technologies and Cairn Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FD Technologies PLC and Cairn Homes PLC, you can compare the effects of market volatilities on FD Technologies and Cairn Homes 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 FD Technologies with a short position of Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of FD Technologies and Cairn Homes.
Diversification Opportunities for FD Technologies and Cairn Homes
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GYQ and Cairn is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding FD Technologies PLC and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC and FD Technologies 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 FD Technologies PLC are associated (or correlated) with Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of FD Technologies i.e., FD Technologies and Cairn Homes go up and down completely randomly.
Pair Corralation between FD Technologies and Cairn Homes
If you would invest 229.00 in Cairn Homes PLC on November 9, 2024 and sell it today you would earn a total of 1.00 from holding Cairn Homes PLC or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FD Technologies PLC vs. Cairn Homes PLC
Performance |
| Timeline |
| FD Technologies PLC |
| Cairn Homes PLC |
FD Technologies and Cairn Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FD Technologies and Cairn Homes
The main advantage of trading using opposite FD Technologies and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FD Technologies position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' long position.| FD Technologies vs. Bank of Ireland | FD Technologies vs. Great Western Mining | FD Technologies vs. Dalata Hotel Group | FD Technologies vs. Datalex |
| Cairn Homes vs. Glenveagh Properties PLC | Cairn Homes vs. AIB Group PLC | Cairn Homes vs. Dalata Hotel Group | Cairn Homes vs. Bank of Ireland |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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