Correlation Between FNP Technologies and Manitou BF
Can any of the company-specific risk be diversified away by investing in both FNP Technologies and Manitou BF 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 Manitou BF 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 Manitou BF SA, you can compare the effects of market volatilities on FNP Technologies and Manitou BF 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 Manitou BF. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNP Technologies and Manitou BF.
Diversification Opportunities for FNP Technologies and Manitou BF
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FNP and Manitou is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FNP Technologies SA and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA 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 Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of FNP Technologies i.e., FNP Technologies and Manitou BF go up and down completely randomly.
Pair Corralation between FNP Technologies and Manitou BF
Assuming the 90 days trading horizon FNP Technologies SA is expected to under-perform the Manitou BF. In addition to that, FNP Technologies is 2.93 times more volatile than Manitou BF SA. It trades about -0.13 of its total potential returns per unit of risk. Manitou BF SA is currently generating about -0.17 per unit of volatility. If you would invest 2,615 in Manitou BF SA on August 29, 2024 and sell it today you would lose (1,045) from holding Manitou BF SA or give up 39.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNP Technologies SA vs. Manitou BF SA
Performance |
| Timeline |
| FNP Technologies |
| Manitou BF SA |
FNP Technologies and Manitou BF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNP Technologies and Manitou BF
The main advantage of trading using opposite FNP Technologies and Manitou BF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNP Technologies position performs unexpectedly, Manitou BF 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 Manitou BF will offset losses from the drop in Manitou BF's long position.| FNP Technologies vs. Blockchain Group SA | FNP Technologies vs. Adocia | FNP Technologies vs. Manitou BF SA | FNP Technologies vs. Ossiam Minimum Variance |
| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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