Correlation Between Synthomer Plc and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and Fair Oaks 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 Synthomer Plc and Fair Oaks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Fair Oaks Income, you can compare the effects of market volatilities on Synthomer Plc and Fair Oaks 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 Synthomer Plc with a short position of Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Fair Oaks.
Diversification Opportunities for Synthomer Plc and Fair Oaks
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synthomer and Fair is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Fair Oaks go up and down completely randomly.
Pair Corralation between Synthomer Plc and Fair Oaks
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the Fair Oaks. In addition to that, Synthomer Plc is 3.42 times more volatile than Fair Oaks Income. It trades about -0.04 of its total potential returns per unit of risk. Fair Oaks Income is currently generating about 0.21 per unit of volatility. If you would invest 55.00 in Fair Oaks Income on September 21, 2024 and sell it today you would earn a total of 2.00 from holding Fair Oaks Income or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Synthomer plc vs. Fair Oaks Income
Performance |
| Timeline |
| Synthomer plc |
| Fair Oaks Income |
Synthomer Plc and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Fair Oaks
The main advantage of trading using opposite Synthomer Plc and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| Synthomer Plc vs. Givaudan SA | Synthomer Plc vs. Antofagasta PLC | Synthomer Plc vs. Ferrexpo PLC | Synthomer Plc vs. Atalaya Mining |
| Fair Oaks vs. Toyota Motor Corp | Fair Oaks vs. SoftBank Group Corp | Fair Oaks vs. OTP Bank Nyrt | Fair Oaks vs. Hershey 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 CEOs Directory module to screen CEOs from public companies around the world.
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