Correlation Between Avanos Medical and FANDIFI TECHNOLOGY

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

By analyzing existing cross correlation between Avanos Medical and FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on Avanos Medical and FANDIFI TECHNOLOGY 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 Avanos Medical with a short position of FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and FANDIFI TECHNOLOGY.

Diversification Opportunities for Avanos Medical and FANDIFI TECHNOLOGY

0.0

Correlation Coefficient

Avanos Medical  FANDIFI TECHNOLOGY

Pay attention - limited upside

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

Pair Corralation between Avanos Medical and FANDIFI TECHNOLOGY

Assuming the 90 days trading horizon Avanos Medical is expected to under-perform the FANDIFI TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Avanos Medical is 10.43 times less risky than FANDIFI TECHNOLOGY. The stock trades about -0.03 of its potential returns per unit of risk. The FANDIFI TECHNOLOGY P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.55  in FANDIFI TECHNOLOGY P on October 4, 2024 and sell it today you would lose (3.50) from holding FANDIFI TECHNOLOGY P or give up 98.59% of portfolio value over 90 days.

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

Avanos Medical  vs.  FANDIFI TECHNOLOGY P

Avanos Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avanos Medical 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Avanos Medical and FANDIFI TECHNOLOGY

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

The idea behind Avanos Medical and FANDIFI TECHNOLOGY P 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.