Correlation Between PICKN PAY and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and Fortescue Metals Group, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Fortescue Metals.
Diversification Opportunities for PICKN PAY and Fortescue Metals
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between PICKN and Fortescue is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and Fortescue Metals go up and down completely randomly.
Pair Corralation between PICKN PAY and Fortescue Metals
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Fortescue Metals. In addition to that, PICKN PAY is 1.58 times more volatile than Fortescue Metals Group. It trades about -0.02 of its total potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.02 per unit of volatility. If you would invest 1,073 in Fortescue Metals Group on November 6, 2024 and sell it today you would earn a total of 87.00 from holding Fortescue Metals Group or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. Fortescue Metals Group
Performance |
| Timeline |
| PICKN PAY STORES |
| Fortescue Metals |
PICKN PAY and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Fortescue Metals
The main advantage of trading using opposite PICKN PAY and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.| PICKN PAY vs. CN MODERN DAIRY | PICKN PAY vs. PREMIER FOODS | PICKN PAY vs. AOI Electronics Co | PICKN PAY vs. Delta Electronics Public |
| Fortescue Metals vs. SPARTAN STORES | Fortescue Metals vs. THAI BEVERAGE | Fortescue Metals vs. Tsingtao Brewery | Fortescue Metals vs. Fast Retailing Co |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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