Correlation Between FLOW TRADERS and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and FIREWEED METALS 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 FIREWEED METALS 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 FIREWEED METALS P, you can compare the effects of market volatilities on FLOW TRADERS and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and FIREWEED METALS.
Diversification Opportunities for FLOW TRADERS and FIREWEED METALS
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FLOW and FIREWEED is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and FIREWEED METALS go up and down completely randomly.
Pair Corralation between FLOW TRADERS and FIREWEED METALS
Assuming the 90 days horizon FLOW TRADERS is expected to generate 1.03 times less return on investment than FIREWEED METALS. But when comparing it to its historical volatility, FLOW TRADERS LTD is 1.73 times less risky than FIREWEED METALS. It trades about 0.06 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 84.00 in FIREWEED METALS P on September 20, 2024 and sell it today you would earn a total of 14.00 from holding FIREWEED METALS P or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. FIREWEED METALS P
Performance |
| Timeline |
| FLOW TRADERS LTD |
| FIREWEED METALS P |
FLOW TRADERS and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and FIREWEED METALS
The main advantage of trading using opposite FLOW TRADERS and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| FLOW TRADERS vs. JLT MOBILE PUTER | FLOW TRADERS vs. Treasury Wine Estates | FLOW TRADERS vs. Sabra Health Care | FLOW TRADERS vs. Cogent Communications Holdings |
| FIREWEED METALS vs. CANON MARKETING JP | FIREWEED METALS vs. Strategic Investments AS | FIREWEED METALS vs. FLOW TRADERS LTD | FIREWEED METALS vs. Chuangs China Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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