Correlation Between Ijj and Fbc Hldg
Can any of the company-specific risk be diversified away by investing in both Ijj and Fbc Hldg 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 Ijj and Fbc Hldg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ijj Corporation and Fbc Hldg, you can compare the effects of market volatilities on Ijj and Fbc Hldg 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 Ijj with a short position of Fbc Hldg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ijj and Fbc Hldg.
Diversification Opportunities for Ijj and Fbc Hldg
Good diversification
The 3 months correlation between Ijj and Fbc is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ijj Corp. and Fbc Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fbc Hldg and Ijj 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 Ijj Corporation are associated (or correlated) with Fbc Hldg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fbc Hldg has no effect on the direction of Ijj i.e., Ijj and Fbc Hldg go up and down completely randomly.
Pair Corralation between Ijj and Fbc Hldg
If you would invest 0.03 in Ijj Corporation on December 9, 2024 and sell it today you would earn a total of 0.00 from holding Ijj Corporation or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ijj Corp. vs. Fbc Hldg
Performance |
| Timeline |
| Ijj Corporation |
| Fbc Hldg |
Ijj and Fbc Hldg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ijj and Fbc Hldg
The main advantage of trading using opposite Ijj and Fbc Hldg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ijj position performs unexpectedly, Fbc Hldg 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 Fbc Hldg will offset losses from the drop in Fbc Hldg's long position.The idea behind Ijj Corporation and Fbc Hldg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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