Correlation Between FLOW TRADERS and Seiko Epson
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and Seiko Epson 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 Seiko Epson 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 Seiko Epson, you can compare the effects of market volatilities on FLOW TRADERS and Seiko Epson 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 Seiko Epson. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Seiko Epson.
Diversification Opportunities for FLOW TRADERS and Seiko Epson
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FLOW and Seiko is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Seiko Epson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seiko Epson 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 Seiko Epson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seiko Epson has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and Seiko Epson go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Seiko Epson
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.98 times more return on investment than Seiko Epson. However, FLOW TRADERS LTD is 1.02 times less risky than Seiko Epson. It trades about 0.02 of its potential returns per unit of risk. Seiko Epson is currently generating about -0.03 per unit of risk. If you would invest 2,100 in FLOW TRADERS LTD on September 1, 2024 and sell it today you would earn a total of 8.00 from holding FLOW TRADERS LTD or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Seiko Epson
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Seiko Epson |
FLOW TRADERS and Seiko Epson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Seiko Epson
The main advantage of trading using opposite FLOW TRADERS and Seiko Epson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, Seiko Epson 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 Seiko Epson will offset losses from the drop in Seiko Epson's long position.| FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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