Correlation Between Wearable Devices and Fenbo Holdings
Can any of the company-specific risk be diversified away by investing in both Wearable Devices and Fenbo Holdings 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 Wearable Devices and Fenbo Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wearable Devices and Fenbo Holdings Limited, you can compare the effects of market volatilities on Wearable Devices and Fenbo Holdings 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 Wearable Devices with a short position of Fenbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wearable Devices and Fenbo Holdings.
Diversification Opportunities for Wearable Devices and Fenbo Holdings
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wearable and Fenbo is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Wearable Devices and Fenbo Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fenbo Holdings and Wearable Devices 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 Wearable Devices are associated (or correlated) with Fenbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fenbo Holdings has no effect on the direction of Wearable Devices i.e., Wearable Devices and Fenbo Holdings go up and down completely randomly.
Pair Corralation between Wearable Devices and Fenbo Holdings
Given the investment horizon of 90 days Wearable Devices is expected to generate 1.39 times less return on investment than Fenbo Holdings. In addition to that, Wearable Devices is 1.39 times more volatile than Fenbo Holdings Limited. It trades about 0.01 of its total potential returns per unit of risk. Fenbo Holdings Limited is currently generating about 0.02 per unit of volatility. If you would invest 444.00 in Fenbo Holdings Limited on August 23, 2024 and sell it today you would lose (225.00) from holding Fenbo Holdings Limited or give up 50.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 49.8% |
| Values | Daily Returns |
Wearable Devices vs. Fenbo Holdings Limited
Performance |
| Timeline |
| Wearable Devices |
| Fenbo Holdings |
Wearable Devices and Fenbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wearable Devices and Fenbo Holdings
The main advantage of trading using opposite Wearable Devices and Fenbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wearable Devices position performs unexpectedly, Fenbo Holdings 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 Fenbo Holdings will offset losses from the drop in Fenbo Holdings' long position.| Wearable Devices vs. Koss Corporation | Wearable Devices vs. Sonos Inc | Wearable Devices vs. LG Display Co | Wearable Devices vs. GoPro Inc |
| Fenbo Holdings vs. SFL Corporation | Fenbo Holdings vs. United Guardian | Fenbo Holdings vs. World Houseware Limited | Fenbo Holdings vs. Eldorado Gold Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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