Correlation Between Amoeba SA and FNP Technologies

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

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

Diversification Opportunities for Amoeba SA and FNP Technologies

-0.52

Correlation Coefficient

Amoeba SA  FNP Technologies

Excellent diversification

The 3 months correlation between Amoeba and FNP is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Amoeba SA and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies and Amoeba SA 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 Amoeba SA are associated (or correlated) with FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Amoeba SA i.e., Amoeba SA and FNP Technologies go up and down completely randomly.

Pair Corralation between Amoeba SA and FNP Technologies

If you would invest  83.00  in Amoeba SA on September 28, 2024 and sell it today you would earn a total of  5.00  from holding Amoeba SA or generate 6.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amoeba SA  vs.  FNP Technologies SA

Amoeba SA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amoeba SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amoeba SA reported solid returns over the last few months and may actually be approaching a breakup point.

FNP Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FNP Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Amoeba SA and FNP Technologies

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

The idea behind Amoeba SA and FNP Technologies SA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.