Correlation Between AVVAA World and Fbc Hldg

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

By analyzing existing cross correlation between AVVAA World Health and Fbc Hldg, you can compare the effects of market volatilities on AVVAA World and Fbc Hldg 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 AVVAA World with a short position of Fbc Hldg. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVVAA World and Fbc Hldg.

Diversification Opportunities for AVVAA World and Fbc Hldg

0.02

Correlation Coefficient

AVVAA World  Fbc Hldg

Significant diversification

The 3 months correlation between AVVAA and Fbc is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding AVVAA World Health and Fbc Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fbc Hldg and AVVAA World 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 AVVAA World Health are associated (or correlated) with Fbc Hldg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fbc Hldg has no effect on the direction of AVVAA World i.e., AVVAA World and Fbc Hldg go up and down completely randomly.

Pair Corralation between AVVAA World and Fbc Hldg

Given the investment horizon of 90 days AVVAA World is expected to generate 10.66 times less return on investment than Fbc Hldg. But when comparing it to its historical volatility, AVVAA World Health is 11.12 times less risky than Fbc Hldg. It trades about 0.12 of its potential returns per unit of risk. Fbc Hldg is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Fbc Hldg on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Fbc Hldg or generate 0.0% return on investment over 90 days.

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

AVVAA World Health  vs.  Fbc Hldg

AVVAA World Health

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AVVAA World Health are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, AVVAA World demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Fbc Hldg

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fbc Hldg are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Fbc Hldg exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AVVAA World and Fbc Hldg

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

The idea behind AVVAA World Health and Fbc Hldg 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.