Correlation Between Stellar and Fathom Holdings
Can any of the company-specific risk be diversified away by investing in both Stellar and Fathom 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 Stellar and Fathom Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Fathom Holdings, you can compare the effects of market volatilities on Stellar and Fathom 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 Stellar with a short position of Fathom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Fathom Holdings.
Diversification Opportunities for Stellar and Fathom Holdings
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stellar and Fathom is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Fathom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fathom Holdings and Stellar 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 Stellar are associated (or correlated) with Fathom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fathom Holdings has no effect on the direction of Stellar i.e., Stellar and Fathom Holdings go up and down completely randomly.
Pair Corralation between Stellar and Fathom Holdings
Assuming the 90 days trading horizon Stellar is expected to generate 2.03 times more return on investment than Fathom Holdings. However, Stellar is 2.03 times more volatile than Fathom Holdings. It trades about 0.19 of its potential returns per unit of risk. Fathom Holdings is currently generating about -0.11 per unit of risk. If you would invest 9.16 in Stellar on November 2, 2024 and sell it today you would earn a total of 33.84 from holding Stellar or generate 369.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.26% |
| Values | Daily Returns |
Stellar vs. Fathom Holdings
Performance |
| Timeline |
| Stellar |
| Fathom Holdings |
Stellar and Fathom Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Fathom Holdings
The main advantage of trading using opposite Stellar and Fathom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Fathom 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 Fathom Holdings will offset losses from the drop in Fathom Holdings' long position.The idea behind Stellar and Fathom Holdings 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.| Fathom Holdings vs. Frp Holdings Ord | Fathom Holdings vs. Marcus Millichap | Fathom Holdings vs. Transcontinental Realty Investors | Fathom Holdings vs. Anywhere Real Estate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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