Correlation Between Givaudan and Fulcrum Metals

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

By analyzing existing cross correlation between Givaudan SA and Fulcrum Metals PLC, you can compare the effects of market volatilities on Givaudan and Fulcrum Metals 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 Givaudan with a short position of Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Fulcrum Metals.

Diversification Opportunities for Givaudan and Fulcrum Metals

0.11

Correlation Coefficient

Givaudan  Fulcrum Metals

Average diversification

The 3 months correlation between Givaudan and Fulcrum is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals PLC and Givaudan 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 Givaudan SA are associated (or correlated) with Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Givaudan i.e., Givaudan and Fulcrum Metals go up and down completely randomly.

Pair Corralation between Givaudan and Fulcrum Metals

Assuming the 90 days trading horizon Givaudan is expected to generate 4.52 times less return on investment than Fulcrum Metals. In addition to that, Givaudan is 1.06 times more volatile than Fulcrum Metals PLC. It trades about 0.05 of its total potential returns per unit of risk. Fulcrum Metals PLC is currently generating about 0.22 per unit of volatility. If you would invest  750.00  in Fulcrum Metals PLC on December 2, 2024 and sell it today you would earn a total of  125.00  from holding Fulcrum Metals PLC or generate 16.67% return on investment over 90 days.

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

Givaudan SA  vs.  Fulcrum Metals PLC

Givaudan SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Givaudan SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Givaudan is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Fulcrum Metals PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fulcrum Metals PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fulcrum Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Givaudan and Fulcrum Metals

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

The idea behind Givaudan SA and Fulcrum Metals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.