Correlation Between Finetechnix CoLtd and Formetal

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

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

Diversification Opportunities for Finetechnix CoLtd and Formetal

0.0

Correlation Coefficient

Finetechnix CoLtd  Formetal

Pay attention - limited upside

The 3 months correlation between Finetechnix and Formetal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal and Finetechnix CoLtd 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 Finetechnix CoLtd are associated (or correlated) with Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Finetechnix CoLtd i.e., Finetechnix CoLtd and Formetal go up and down completely randomly.

Pair Corralation between Finetechnix CoLtd and Formetal

If you would invest  280,808  in Formetal Co on October 7, 2024 and sell it today you would earn a total of  74,692  from holding Formetal Co or generate 26.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Finetechnix CoLtd  vs.  Formetal Co

Finetechnix CoLtd

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Finetechnix CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Finetechnix CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Formetal

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Formetal Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Formetal sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Finetechnix CoLtd and Formetal

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

The idea behind Finetechnix CoLtd and Formetal 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.