Correlation Between FNP Technologies and Linedata Services
Can any of the company-specific risk be diversified away by investing in both FNP Technologies and Linedata Services 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 FNP Technologies and Linedata Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNP Technologies SA and Linedata Services SA, you can compare the effects of market volatilities on FNP Technologies and Linedata Services 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 FNP Technologies with a short position of Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNP Technologies and Linedata Services.
Diversification Opportunities for FNP Technologies and Linedata Services
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FNP and Linedata is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding FNP Technologies SA and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services and FNP 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 FNP Technologies SA are associated (or correlated) with Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of FNP Technologies i.e., FNP Technologies and Linedata Services go up and down completely randomly.
Pair Corralation between FNP Technologies and Linedata Services
If you would invest 8,000 in Linedata Services SA on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Linedata Services SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNP Technologies SA vs. Linedata Services SA
Performance |
| Timeline |
| FNP Technologies |
| Linedata Services |
FNP Technologies and Linedata Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNP Technologies and Linedata Services
The main advantage of trading using opposite FNP Technologies and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNP Technologies position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.| FNP Technologies vs. Linedata Services SA | FNP Technologies vs. Affluent Medical SAS | FNP Technologies vs. Eutelsat Communications SA | FNP Technologies vs. Gaztransport Technigaz SAS |
| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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