Correlation Between VCI Global and FTI Consulting
Can any of the company-specific risk be diversified away by investing in both VCI Global and FTI Consulting 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 VCI Global and FTI Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VCI Global Limited and FTI Consulting, you can compare the effects of market volatilities on VCI Global and FTI Consulting 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 VCI Global with a short position of FTI Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and FTI Consulting.
Diversification Opportunities for VCI Global and FTI Consulting
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VCI and FTI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and FTI Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTI Consulting and VCI Global 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 VCI Global Limited are associated (or correlated) with FTI Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTI Consulting has no effect on the direction of VCI Global i.e., VCI Global and FTI Consulting go up and down completely randomly.
Pair Corralation between VCI Global and FTI Consulting
Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the FTI Consulting. In addition to that, VCI Global is 10.04 times more volatile than FTI Consulting. It trades about -0.21 of its total potential returns per unit of risk. FTI Consulting is currently generating about 0.12 per unit of volatility. If you would invest 19,829 in FTI Consulting on August 28, 2024 and sell it today you would earn a total of 581.00 from holding FTI Consulting or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VCI Global Limited vs. FTI Consulting
Performance |
| Timeline |
| VCI Global Limited |
| FTI Consulting |
VCI Global and FTI Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VCI Global and FTI Consulting
The main advantage of trading using opposite VCI Global and FTI Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global position performs unexpectedly, FTI Consulting 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 FTI Consulting will offset losses from the drop in FTI Consulting's long position.| VCI Global vs. Genpact Limited | VCI Global vs. Broadridge Financial Solutions | VCI Global vs. First Advantage Corp | VCI Global vs. Franklin Covey |
| FTI Consulting vs. Franklin Covey | FTI Consulting vs. TransUnion | FTI Consulting vs. ICF International | FTI Consulting vs. Huron Consulting Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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