Correlation Between Carawine Resources and FSA

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

By analyzing existing cross correlation between Carawine Resources Limited and FSA Group, you can compare the effects of market volatilities on Carawine Resources and FSA 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 Carawine Resources with a short position of FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carawine Resources and FSA.

Diversification Opportunities for Carawine Resources and FSA

-0.14

Correlation Coefficient

Carawine Resources  FSA

Good diversification

The 3 months correlation between Carawine and FSA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Carawine Resources Limited and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group and Carawine Resources 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 Carawine Resources Limited are associated (or correlated) with FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Carawine Resources i.e., Carawine Resources and FSA go up and down completely randomly.

Pair Corralation between Carawine Resources and FSA

Assuming the 90 days trading horizon Carawine Resources Limited is expected to generate 2.09 times more return on investment than FSA. However, Carawine Resources is 2.09 times more volatile than FSA Group. It trades about 0.06 of its potential returns per unit of risk. FSA Group is currently generating about 0.07 per unit of risk. If you would invest  10.00  in Carawine Resources Limited on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Carawine Resources Limited or generate 10.0% return on investment over 90 days.

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

Carawine Resources Limited  vs.  FSA Group

Carawine Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Carawine Resources Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Carawine Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

FSA Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FSA Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FSA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Carawine Resources and FSA

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

The idea behind Carawine Resources Limited and FSA Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.