Correlation Between FLOW TRADERS and Ipsen SA
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and Ipsen 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 FLOW TRADERS and Ipsen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Ipsen SA, you can compare the effects of market volatilities on FLOW TRADERS and Ipsen 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 FLOW TRADERS with a short position of Ipsen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Ipsen SA.
Diversification Opportunities for FLOW TRADERS and Ipsen SA
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FLOW and Ipsen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Ipsen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsen SA and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with Ipsen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsen SA has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and Ipsen SA go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Ipsen SA
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.59 times more return on investment than Ipsen SA. However, FLOW TRADERS is 1.59 times more volatile than Ipsen SA. It trades about 0.22 of its potential returns per unit of risk. Ipsen SA is currently generating about 0.14 per unit of risk. If you would invest 2,172 in FLOW TRADERS LTD on November 5, 2024 and sell it today you would earn a total of 212.00 from holding FLOW TRADERS LTD or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Ipsen SA
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Ipsen SA |
FLOW TRADERS and Ipsen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Ipsen SA
The main advantage of trading using opposite FLOW TRADERS and Ipsen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, Ipsen 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 Ipsen SA will offset losses from the drop in Ipsen SA's long position.| FLOW TRADERS vs. Gaztransport Technigaz SA | FLOW TRADERS vs. NorAm Drilling AS | FLOW TRADERS vs. GOLD ROAD RES | FLOW TRADERS vs. QUEEN S ROAD |
| Ipsen SA vs. China Eastern Airlines | Ipsen SA vs. Direct Line Insurance | Ipsen SA vs. CHIBA BANK | Ipsen SA vs. BE Semiconductor Industries |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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