Correlation Between FDO INV and Cable One

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

By analyzing existing cross correlation between FDO INV IMOB and Cable One, you can compare the effects of market volatilities on FDO INV and Cable One 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 FDO INV with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and Cable One.

Diversification Opportunities for FDO INV and Cable One

-0.81

Correlation Coefficient

FDO INV  Cable One

Pay attention - limited upside

The 3 months correlation between FDO and Cable is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and FDO INV 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 FDO INV IMOB are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of FDO INV i.e., FDO INV and Cable One go up and down completely randomly.

Pair Corralation between FDO INV and Cable One

Assuming the 90 days trading horizon FDO INV IMOB is expected to generate 16.66 times more return on investment than Cable One. However, FDO INV is 16.66 times more volatile than Cable One. It trades about 0.07 of its potential returns per unit of risk. Cable One is currently generating about -0.09 per unit of risk. If you would invest  19.00  in FDO INV IMOB on December 4, 2024 and sell it today you would earn a total of  144,231  from holding FDO INV IMOB or generate 759110.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	73.99%
Values	Daily Returns

FDO INV IMOB  vs.  Cable One

FDO INV IMOB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FDO INV IMOB are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, FDO INV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cable One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cable One has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with FDO INV and Cable One

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

The idea behind FDO INV IMOB and Cable One 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.