Correlation Between BANK CENTRAL and FARO Technologies

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

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

Diversification Opportunities for BANK CENTRAL and FARO Technologies

0.0

Correlation Coefficient

BANK CENTRAL  FARO Technologies

Pay attention - limited upside

The 3 months correlation between BANK and FARO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and FARO Technologies go up and down completely randomly.

Pair Corralation between BANK CENTRAL and FARO Technologies

If you would invest  1,620  in FARO Technologies on September 5, 2024 and sell it today you would earn a total of  900.00  from holding FARO Technologies or generate 55.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.78%
Values	Daily Returns

BANK CENTRAL ASIA  vs.  FARO Technologies

BANK CENTRAL ASIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BANK CENTRAL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

FARO Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FARO Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FARO Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK CENTRAL and FARO Technologies

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

The idea behind BANK CENTRAL ASIA and FARO Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.