Correlation Between Verizon Communications and FingerMotion
Can any of the company-specific risk be diversified away by investing in both Verizon Communications and FingerMotion 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 Verizon Communications and FingerMotion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and FingerMotion, you can compare the effects of market volatilities on Verizon Communications and FingerMotion 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 Verizon Communications with a short position of FingerMotion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and FingerMotion.
Diversification Opportunities for Verizon Communications and FingerMotion
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Verizon and FingerMotion is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion and Verizon Communications 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 Verizon Communications are associated (or correlated) with FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of Verizon Communications i.e., Verizon Communications and FingerMotion go up and down completely randomly.
Pair Corralation between Verizon Communications and FingerMotion
Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 0.27 times more return on investment than FingerMotion. However, Verizon Communications is 3.68 times less risky than FingerMotion. It trades about 0.3 of its potential returns per unit of risk. FingerMotion is currently generating about 0.04 per unit of risk. If you would invest 4,128 in Verizon Communications on August 31, 2024 and sell it today you would earn a total of 310.00 from holding Verizon Communications or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verizon Communications vs. FingerMotion
Performance |
| Timeline |
| Verizon Communications |
| FingerMotion |
Verizon Communications and FingerMotion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verizon Communications and FingerMotion
The main advantage of trading using opposite Verizon Communications and FingerMotion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications position performs unexpectedly, FingerMotion 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 FingerMotion will offset losses from the drop in FingerMotion's long position.| Verizon Communications vs. RLJ Lodging Trust | Verizon Communications vs. Aquagold International | Verizon Communications vs. Stepstone Group | Verizon Communications vs. Morningstar Unconstrained Allocation |
| FingerMotion vs. Liberty Broadband Srs | FingerMotion vs. KT Corporation | FingerMotion vs. Liberty Broadband Srs | FingerMotion vs. Consolidated Communications |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stocks Directory Find actively traded stocks across global markets |