Correlation Between Clarkston Founders and FT Vest

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

By analyzing existing cross correlation between Clarkston Founders and FT Vest Equity, you can compare the effects of market volatilities on Clarkston Founders and FT Vest 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 Clarkston Founders with a short position of FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarkston Founders and FT Vest.

Diversification Opportunities for Clarkston Founders and FT Vest

0.74

Correlation Coefficient

Clarkston Founders  FT Vest

Poor diversification

The 3 months correlation between Clarkston and DHDG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Clarkston Founders and FT Vest Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Equity and Clarkston Founders 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 Clarkston Founders are associated (or correlated) with FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Equity has no effect on the direction of Clarkston Founders i.e., Clarkston Founders and FT Vest go up and down completely randomly.

Pair Corralation between Clarkston Founders and FT Vest

Assuming the 90 days horizon Clarkston Founders is expected to generate 1.48 times more return on investment than FT Vest. However, Clarkston Founders is 1.48 times more volatile than FT Vest Equity. It trades about -0.02 of its potential returns per unit of risk. FT Vest Equity is currently generating about -0.04 per unit of risk. If you would invest  1,595  in Clarkston Founders on December 29, 2024 and sell it today you would lose (17.00) from holding Clarkston Founders or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Clarkston Founders  vs.  FT Vest Equity

Clarkston Founders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clarkston Founders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Clarkston Founders is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FT Vest Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Clarkston Founders and FT Vest

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

The idea behind Clarkston Founders and FT Vest Equity 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.