Correlation Between Perpetual Credit and Finexia Financial
Can any of the company-specific risk be diversified away by investing in both Perpetual Credit and Finexia Financial 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 Perpetual Credit and Finexia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perpetual Credit Income and Finexia Financial Group, you can compare the effects of market volatilities on Perpetual Credit and Finexia Financial 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 Perpetual Credit with a short position of Finexia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetual Credit and Finexia Financial.
Diversification Opportunities for Perpetual Credit and Finexia Financial
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perpetual and Finexia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial and Perpetual Credit 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 Perpetual Credit Income are associated (or correlated) with Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and Finexia Financial go up and down completely randomly.
Pair Corralation between Perpetual Credit and Finexia Financial
Assuming the 90 days trading horizon Perpetual Credit is expected to generate 21.26 times less return on investment than Finexia Financial. But when comparing it to its historical volatility, Perpetual Credit Income is 2.56 times less risky than Finexia Financial. It trades about 0.04 of its potential returns per unit of risk. Finexia Financial Group is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Finexia Financial Group on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Finexia Financial Group or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perpetual Credit Income vs. Finexia Financial Group
Performance |
| Timeline |
| Perpetual Credit Income |
| Finexia Financial |
Perpetual Credit and Finexia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perpetual Credit and Finexia Financial
The main advantage of trading using opposite Perpetual Credit and Finexia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perpetual Credit position performs unexpectedly, Finexia Financial 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 Finexia Financial will offset losses from the drop in Finexia Financial's long position.| Perpetual Credit vs. ABACUS STORAGE KING | Perpetual Credit vs. Midway | Perpetual Credit vs. Aristocrat Leisure | Perpetual Credit vs. Imricor Medical Systems |
| Finexia Financial vs. Ragnar Metals | Finexia Financial vs. Macquarie Bank Limited | Finexia Financial vs. American West Metals | Finexia Financial vs. Perpetual Credit Income |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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