Correlation Between H2O Retailing and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and Fortescue Metals 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 H2O Retailing and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and Fortescue Metals Group, you can compare the effects of market volatilities on H2O Retailing and Fortescue Metals 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 H2O Retailing with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and Fortescue Metals.
Diversification Opportunities for H2O Retailing and Fortescue Metals
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between H2O and Fortescue is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and H2O Retailing 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 H2O Retailing are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of H2O Retailing i.e., H2O Retailing and Fortescue Metals go up and down completely randomly.
Pair Corralation between H2O Retailing and Fortescue Metals
Assuming the 90 days horizon H2O Retailing is expected to generate 0.76 times more return on investment than Fortescue Metals. However, H2O Retailing is 1.31 times less risky than Fortescue Metals. It trades about 0.08 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.04 per unit of risk. If you would invest 1,400 in H2O Retailing on November 3, 2024 and sell it today you would earn a total of 30.00 from holding H2O Retailing or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. Fortescue Metals Group
Performance |
| Timeline |
| H2O Retailing |
| Fortescue Metals |
H2O Retailing and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and Fortescue Metals
The main advantage of trading using opposite H2O Retailing and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| H2O Retailing vs. MHP Hotel AG | H2O Retailing vs. COVIVIO HOTELS INH | H2O Retailing vs. DALATA HOTEL | H2O Retailing vs. CENTURIA OFFICE REIT |
| Fortescue Metals vs. New China Life | Fortescue Metals vs. Sunny Optical Technology | Fortescue Metals vs. X FAB Silicon Foundries | Fortescue Metals vs. VIENNA INSURANCE GR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |