Correlation Between FDG Electric and STOAU

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

By analyzing existing cross correlation between FDG Electric Vehicles and STOAU 3649 29 APR 31, you can compare the effects of market volatilities on FDG Electric and STOAU 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 FDG Electric with a short position of STOAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDG Electric and STOAU.

Diversification Opportunities for FDG Electric and STOAU

0.0

Correlation Coefficient

FDG Electric  STOAU

Pay attention - limited upside

The 3 months correlation between FDG and STOAU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FDG Electric Vehicles and STOAU 3649 29 APR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOAU 3649 29 and FDG Electric 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 FDG Electric Vehicles are associated (or correlated) with STOAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOAU 3649 29 has no effect on the direction of FDG Electric i.e., FDG Electric and STOAU go up and down completely randomly.

Pair Corralation between FDG Electric and STOAU

If you would invest  8,002  in STOAU 3649 29 APR 31 on September 18, 2024 and sell it today you would earn a total of  819.00  from holding STOAU 3649 29 APR 31 or generate 10.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

FDG Electric Vehicles  vs.  STOAU 3649 29 APR 31

FDG Electric Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDG Electric Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, FDG Electric is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

STOAU 3649 29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STOAU 3649 29 APR 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STOAU is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FDG Electric and STOAU

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

The idea behind FDG Electric Vehicles and STOAU 3649 29 APR 31 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.