Correlation Between Mauna Kea and FNP Technologies

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

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

Diversification Opportunities for Mauna Kea and FNP Technologies

0.0

Correlation Coefficient

Mauna Kea  FNP Technologies

Pay attention - limited upside

The 3 months correlation between Mauna and FNP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies and Mauna Kea 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 Mauna Kea Technologies 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 Mauna Kea i.e., Mauna Kea and FNP Technologies go up and down completely randomly.

Pair Corralation between Mauna Kea and FNP Technologies

Assuming the 90 days trading horizon Mauna Kea Technologies is expected to generate 0.64 times more return on investment than FNP Technologies. However, Mauna Kea Technologies is 1.57 times less risky than FNP Technologies. It trades about -0.04 of its potential returns per unit of risk. FNP Technologies SA is currently generating about -0.03 per unit of risk. If you would invest  51.00  in Mauna Kea Technologies on October 9, 2024 and sell it today you would lose (33.00) from holding Mauna Kea Technologies or give up 64.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.04%
Values	Daily Returns

Mauna Kea Technologies  vs.  FNP Technologies SA

Mauna Kea Technologies

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Mauna Kea Technologies 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 relatively invariable basic indicators, FNP Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mauna Kea and FNP Technologies

The main advantage of trading using opposite Mauna Kea and FNP Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea 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 Mauna Kea Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.