Correlation Between SERI INDUSTRIAL and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Fortescue 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 SERI INDUSTRIAL and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Fortescue Metals Group, you can compare the effects of market volatilities on SERI INDUSTRIAL and Fortescue 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 SERI INDUSTRIAL with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Fortescue Metals.
Diversification Opportunities for SERI INDUSTRIAL and Fortescue Metals
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SERI and Fortescue is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Fortescue Metals go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Fortescue Metals
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to generate 1.49 times more return on investment than Fortescue Metals. However, SERI INDUSTRIAL is 1.49 times more volatile than Fortescue Metals Group. It trades about -0.25 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about -0.44 per unit of risk. If you would invest 271.00 in SERI INDUSTRIAL EO on October 12, 2024 and sell it today you would lose (31.00) from holding SERI INDUSTRIAL EO or give up 11.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Fortescue Metals Group
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Fortescue Metals |
SERI INDUSTRIAL and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Fortescue Metals
The main advantage of trading using opposite SERI INDUSTRIAL and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, Fortescue 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| SERI INDUSTRIAL vs. TOREX SEMICONDUCTOR LTD | SERI INDUSTRIAL vs. Fast Retailing Co | SERI INDUSTRIAL vs. Tradeweb Markets | SERI INDUSTRIAL vs. FAST RETAIL ADR |
| Fortescue Metals vs. Sinopec Shanghai Petrochemical | Fortescue Metals vs. Mitsui Chemicals | Fortescue Metals vs. EBRO FOODS | Fortescue Metals vs. X FAB Silicon Foundries |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |