Correlation Between FMEGR and Vodka Brands
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By analyzing existing cross correlation between FMEGR 2375 16 FEB 31 and Vodka Brands Corp, you can compare the effects of market volatilities on FMEGR and Vodka Brands 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 FMEGR with a short position of Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMEGR and Vodka Brands.
Diversification Opportunities for FMEGR and Vodka Brands
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FMEGR and Vodka is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FMEGR 2375 16 FEB 31 and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp and FMEGR 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 FMEGR 2375 16 FEB 31 are associated (or correlated) with Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of FMEGR i.e., FMEGR and Vodka Brands go up and down completely randomly.
Pair Corralation between FMEGR and Vodka Brands
Assuming the 90 days trading horizon FMEGR is expected to generate 11.0 times less return on investment than Vodka Brands. But when comparing it to its historical volatility, FMEGR 2375 16 FEB 31 is 13.4 times less risky than Vodka Brands. It trades about 0.22 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Vodka Brands Corp on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Vodka Brands Corp or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
FMEGR 2375 16 FEB 31 vs. Vodka Brands Corp
Performance |
| Timeline |
| FMEGR 2375 16 |
| Vodka Brands Corp |
FMEGR and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FMEGR and Vodka Brands
The main advantage of trading using opposite FMEGR and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMEGR position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' long position.The idea behind FMEGR 2375 16 FEB 31 and Vodka Brands Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Pernod Ricard SA | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Brown Forman |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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