Correlation Between Datalogic and Fonix Mobile

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

By analyzing existing cross correlation between Datalogic and Fonix Mobile plc, you can compare the effects of market volatilities on Datalogic and Fonix Mobile 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 Datalogic with a short position of Fonix Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic and Fonix Mobile.

Diversification Opportunities for Datalogic and Fonix Mobile

0.37

Correlation Coefficient

Datalogic  Fonix Mobile

Weak diversification

The 3 months correlation between Datalogic and Fonix is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic and Fonix Mobile plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonix Mobile plc and Datalogic 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 Datalogic are associated (or correlated) with Fonix Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonix Mobile plc has no effect on the direction of Datalogic i.e., Datalogic and Fonix Mobile go up and down completely randomly.

Pair Corralation between Datalogic and Fonix Mobile

Assuming the 90 days trading horizon Datalogic is expected to under-perform the Fonix Mobile. In addition to that, Datalogic is 1.0 times more volatile than Fonix Mobile plc. It trades about -0.36 of its total potential returns per unit of risk. Fonix Mobile plc is currently generating about -0.25 per unit of volatility. If you would invest  23,785  in Fonix Mobile plc on September 4, 2024 and sell it today you would lose (2,185) from holding Fonix Mobile plc or give up 9.19% of portfolio value over 90 days.

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

Datalogic  vs.  Fonix Mobile plc

Datalogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fonix Mobile plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fonix Mobile plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Fonix Mobile is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Datalogic and Fonix Mobile

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

The idea behind Datalogic and Fonix Mobile 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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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.