Correlation Between VFD GROUP and FIDSON HEALTHCARE

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Can any of the company-specific risk be diversified away by investing in both VFD GROUP and FIDSON HEALTHCARE 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 VFD GROUP and FIDSON HEALTHCARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VFD GROUP and FIDSON HEALTHCARE PLC, you can compare the effects of market volatilities on VFD GROUP and FIDSON HEALTHCARE 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 VFD GROUP with a short position of FIDSON HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VFD GROUP and FIDSON HEALTHCARE.

Diversification Opportunities for VFD GROUP and FIDSON HEALTHCARE

VFDFIDSONDiversified AwayVFDFIDSONDiversified Away100%
0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between VFD and FIDSON is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding VFD GROUP and FIDSON HEALTHCARE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIDSON HEALTHCARE PLC and VFD GROUP 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 VFD GROUP are associated (or correlated) with FIDSON HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIDSON HEALTHCARE PLC has no effect on the direction of VFD GROUP i.e., VFD GROUP and FIDSON HEALTHCARE go up and down completely randomly.

Pair Corralation between VFD GROUP and FIDSON HEALTHCARE

Assuming the 90 days trading horizon VFD GROUP is expected to generate 1.18 times more return on investment than FIDSON HEALTHCARE. However, VFD GROUP is 1.18 times more volatile than FIDSON HEALTHCARE PLC. It trades about 0.2 of its potential returns per unit of risk. FIDSON HEALTHCARE PLC is currently generating about 0.01 per unit of risk. If you would invest  4,440  in VFD GROUP on December 8, 2024 and sell it today you would earn a total of  800.00  from holding VFD GROUP or generate 18.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

VFD GROUP  vs.  FIDSON HEALTHCARE PLC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15VFDGROUP FIDSON
       Timeline  
VFD GROUP 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in VFD GROUP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VFD GROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar40455055
FIDSON HEALTHCARE PLC 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in FIDSON HEALTHCARE PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, FIDSON HEALTHCARE sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar1415161718192021

VFD GROUP and FIDSON HEALTHCARE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.37-5.52-3.67-1.820.03081.933.895.857.81 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15VFDGROUP FIDSON
       Returns  

Pair Trading with VFD GROUP and FIDSON HEALTHCARE

The main advantage of trading using opposite VFD GROUP and FIDSON HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VFD GROUP position performs unexpectedly, FIDSON HEALTHCARE 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 FIDSON HEALTHCARE will offset losses from the drop in FIDSON HEALTHCARE's long position.
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The idea behind VFD GROUP and FIDSON HEALTHCARE PLC 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.
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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