Correlation Between FOSTOURGRP EO-0001 and CARSALES

Can any of the company-specific risk be diversified away by investing in both FOSTOURGRP EO-0001 and CARSALES 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 FOSTOURGRP EO-0001 and CARSALES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FOSTOURGRP EO 0001 and CARSALESCOM, you can compare the effects of market volatilities on FOSTOURGRP EO-0001 and CARSALES 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 FOSTOURGRP EO-0001 with a short position of CARSALES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOSTOURGRP EO-0001 and CARSALES.

Diversification Opportunities for FOSTOURGRP EO-0001 and CARSALES

-0.65

Correlation Coefficient

FOSTOURGRP EO-0001  CARSALES

Excellent diversification

The 3 months correlation between FOSTOURGRP and CARSALES is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding FOSTOURGRP EO 0001 and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM and FOSTOURGRP EO-0001 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 FOSTOURGRP EO 0001 are associated (or correlated) with CARSALES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of FOSTOURGRP EO-0001 i.e., FOSTOURGRP EO-0001 and CARSALES go up and down completely randomly.

Pair Corralation between FOSTOURGRP EO-0001 and CARSALES

Assuming the 90 days horizon FOSTOURGRP EO 0001 is expected to generate 0.41 times more return on investment than CARSALES. However, FOSTOURGRP EO 0001 is 2.45 times less risky than CARSALES. It trades about 0.05 of its potential returns per unit of risk. CARSALESCOM is currently generating about -0.07 per unit of risk. If you would invest  90.00  in FOSTOURGRP EO 0001 on December 26, 2024 and sell it today you would earn a total of  2.00  from holding FOSTOURGRP EO 0001 or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

FOSTOURGRP EO 0001  vs.  CARSALESCOM

FOSTOURGRP EO 0001

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FOSTOURGRP EO 0001 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FOSTOURGRP EO-0001 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

CARSALESCOM

Risk-Adjusted Performance

Very Weak

Over the last 90 days CARSALESCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with FOSTOURGRP EO-0001 and CARSALES

The main advantage of trading using opposite FOSTOURGRP EO-0001 and CARSALES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOSTOURGRP EO-0001 position performs unexpectedly, CARSALES 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 CARSALES will offset losses from the drop in CARSALES's long position.

The idea behind FOSTOURGRP EO 0001 and CARSALESCOM 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.