Correlation Between FNP Technologies and Orapi SA
Can any of the company-specific risk be diversified away by investing in both FNP Technologies and Orapi SA 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 Orapi SA 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 Orapi SA, you can compare the effects of market volatilities on FNP Technologies and Orapi SA 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 Orapi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNP Technologies and Orapi SA.
Diversification Opportunities for FNP Technologies and Orapi SA
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FNP and Orapi is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding FNP Technologies SA and Orapi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orapi 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 Orapi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orapi SA has no effect on the direction of FNP Technologies i.e., FNP Technologies and Orapi SA go up and down completely randomly.
Pair Corralation between FNP Technologies and Orapi SA
Assuming the 90 days trading horizon FNP Technologies SA is expected to under-perform the Orapi SA. In addition to that, FNP Technologies is 2.69 times more volatile than Orapi SA. It trades about -0.03 of its total potential returns per unit of risk. Orapi SA is currently generating about 0.03 per unit of volatility. If you would invest 499.00 in Orapi SA on August 26, 2024 and sell it today you would earn a total of 147.00 from holding Orapi SA or generate 29.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.27% |
| Values | Daily Returns |
FNP Technologies SA vs. Orapi SA
Performance |
| Timeline |
| FNP Technologies |
| Orapi SA |
FNP Technologies and Orapi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNP Technologies and Orapi SA
The main advantage of trading using opposite FNP Technologies and Orapi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNP Technologies position performs unexpectedly, Orapi SA 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 Orapi SA will offset losses from the drop in Orapi SA's long position.| FNP Technologies vs. Blockchain Group SA | FNP Technologies vs. Manitou BF SA | FNP Technologies vs. Ossiam Minimum Variance | FNP Technologies vs. Granite 3x LVMH |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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