Correlation Between Iodm and Future Generation
Can any of the company-specific risk be diversified away by investing in both Iodm and Future Generation 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 Iodm and Future Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iodm and Future Generation Global, you can compare the effects of market volatilities on Iodm and Future Generation 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 Iodm with a short position of Future Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iodm and Future Generation.
Diversification Opportunities for Iodm and Future Generation
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iodm and Future is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Iodm and Future Generation Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Generation Global and Iodm 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 Iodm are associated (or correlated) with Future Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Generation Global has no effect on the direction of Iodm i.e., Iodm and Future Generation go up and down completely randomly.
Pair Corralation between Iodm and Future Generation
Assuming the 90 days trading horizon Iodm is expected to under-perform the Future Generation. In addition to that, Iodm is 3.57 times more volatile than Future Generation Global. It trades about -0.02 of its total potential returns per unit of risk. Future Generation Global is currently generating about 0.11 per unit of volatility. If you would invest 121.00 in Future Generation Global on September 3, 2024 and sell it today you would earn a total of 18.00 from holding Future Generation Global or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iodm vs. Future Generation Global
Performance |
| Timeline |
| Iodm |
| Future Generation Global |
Iodm and Future Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iodm and Future Generation
The main advantage of trading using opposite Iodm and Future Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iodm position performs unexpectedly, Future Generation 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 Future Generation will offset losses from the drop in Future Generation's long position.| Iodm vs. Cleanaway Waste Management | Iodm vs. K2 Asset Management | Iodm vs. Clime Investment Management | Iodm vs. Computershare |
| Future Generation vs. Audio Pixels Holdings | Future Generation vs. Iodm | Future Generation vs. Nsx | Future Generation vs. TTG Fintech |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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