Correlation Between Farsoon Technology and Innovative Medical

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

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

Diversification Opportunities for Farsoon Technology and Innovative Medical

0.0

Correlation Coefficient

Farsoon Technology  Innovative Medical

Pay attention - limited upside

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

Pair Corralation between Farsoon Technology and Innovative Medical

If you would invest  834.00  in Innovative Medical Management on December 28, 2024 and sell it today you would earn a total of  107.00  from holding Innovative Medical Management or generate 12.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Farsoon Technology Co  vs.  Innovative Medical Management

Farsoon Technology

Risk-Adjusted Performance

Very Weak

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

Innovative Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Medical Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Innovative Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Farsoon Technology and Innovative Medical

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

The idea behind Farsoon Technology Co and Innovative Medical Management 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.