Correlation Between Sancus Lending and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Sancus Lending and Ferrexpo PLC 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 Sancus Lending and Ferrexpo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sancus Lending Group and Ferrexpo PLC, you can compare the effects of market volatilities on Sancus Lending and Ferrexpo PLC 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 Sancus Lending with a short position of Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sancus Lending and Ferrexpo PLC.
Diversification Opportunities for Sancus Lending and Ferrexpo PLC
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sancus and Ferrexpo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sancus Lending Group and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC and Sancus Lending 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 Sancus Lending Group are associated (or correlated) with Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Sancus Lending i.e., Sancus Lending and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Sancus Lending and Ferrexpo PLC
Assuming the 90 days trading horizon Sancus Lending Group is expected to under-perform the Ferrexpo PLC. But the stock apears to be less risky and, when comparing its historical volatility, Sancus Lending Group is 2.43 times less risky than Ferrexpo PLC. The stock trades about -0.12 of its potential returns per unit of risk. The Ferrexpo PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,900 in Ferrexpo PLC on August 28, 2024 and sell it today you would earn a total of 1,810 from holding Ferrexpo PLC or generate 30.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sancus Lending Group vs. Ferrexpo PLC
Performance |
| Timeline |
| Sancus Lending Group |
| Ferrexpo PLC |
Sancus Lending and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sancus Lending and Ferrexpo PLC
The main advantage of trading using opposite Sancus Lending and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sancus Lending position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Sancus Lending vs. Universal Display Corp | Sancus Lending vs. Norman Broadbent Plc | Sancus Lending vs. Young Cos Brewery | Sancus Lending vs. Gaztransport et Technigaz |
| Ferrexpo PLC vs. Charter Communications Cl | Ferrexpo PLC vs. Virgin Wines UK | Ferrexpo PLC vs. GreenX Metals | Ferrexpo PLC vs. Spirent Communications plc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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