Correlation Between Algorand and FineMat Applied

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

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

Diversification Opportunities for Algorand and FineMat Applied

0.53

Correlation Coefficient

Algorand  FineMat Applied

Very weak diversification

The 3 months correlation between Algorand and FineMat is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and FineMat Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMat Applied Materials and Algorand 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 Algorand are associated (or correlated) with FineMat Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMat Applied Materials has no effect on the direction of Algorand i.e., Algorand and FineMat Applied go up and down completely randomly.

Pair Corralation between Algorand and FineMat Applied

Assuming the 90 days trading horizon Algorand is expected to under-perform the FineMat Applied. In addition to that, Algorand is 3.81 times more volatile than FineMat Applied Materials. It trades about -0.14 of its total potential returns per unit of risk. FineMat Applied Materials is currently generating about -0.06 per unit of volatility. If you would invest  3,635  in FineMat Applied Materials on December 24, 2024 and sell it today you would lose (220.00) from holding FineMat Applied Materials or give up 6.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	87.5%
Values	Daily Returns

Algorand  vs.  FineMat Applied Materials

Algorand

Risk-Adjusted Performance

Very Weak

Over the last 90 days Algorand has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Algorand shareholders.

FineMat Applied Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days FineMat Applied Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, FineMat Applied is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Algorand and FineMat Applied

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

The idea behind Algorand and FineMat Applied Materials 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.