Correlation Between FSPG Hi and Bus Online

Can any of the company-specific risk be diversified away by investing in both FSPG Hi and Bus Online 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 FSPG Hi and Bus Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FSPG Hi Tech Co and Bus Online Co, you can compare the effects of market volatilities on FSPG Hi and Bus Online 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 FSPG Hi with a short position of Bus Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of FSPG Hi and Bus Online.

Diversification Opportunities for FSPG Hi and Bus Online

0.69

Correlation Coefficient

FSPG Hi  Bus Online

Poor diversification

The 3 months correlation between FSPG and Bus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FSPG Hi Tech Co and Bus Online Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bus Online and FSPG Hi 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 FSPG Hi Tech Co are associated (or correlated) with Bus Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bus Online has no effect on the direction of FSPG Hi i.e., FSPG Hi and Bus Online go up and down completely randomly.

Pair Corralation between FSPG Hi and Bus Online

Assuming the 90 days trading horizon FSPG Hi Tech Co is expected to under-perform the Bus Online. In addition to that, FSPG Hi is 1.58 times more volatile than Bus Online Co. It trades about -0.29 of its total potential returns per unit of risk. Bus Online Co is currently generating about 0.1 per unit of volatility. If you would invest  498.00  in Bus Online Co on September 22, 2024 and sell it today you would earn a total of  29.00  from holding Bus Online Co or generate 5.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

FSPG Hi Tech Co  vs.  Bus Online Co

FSPG Hi Tech

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FSPG Hi Tech Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FSPG Hi sustained solid returns over the last few months and may actually be approaching a breakup point.

Bus Online

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bus Online Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bus Online sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FSPG Hi and Bus Online

The main advantage of trading using opposite FSPG Hi and Bus Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FSPG Hi position performs unexpectedly, Bus Online 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 Bus Online will offset losses from the drop in Bus Online's long position.

The idea behind FSPG Hi Tech Co and Bus Online Co 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.