Correlation Between Flaherty and Flaherty Crumrine

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

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

Diversification Opportunities for Flaherty and Flaherty Crumrine

0.94

Correlation Coefficient

Flaherty  Flaherty Crumrine

Almost no diversification

The 3 months correlation between Flaherty and Flaherty is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Flaherty and Crumrine and Flaherty Crumrine Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine and Flaherty 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 Flaherty and Crumrine are associated (or correlated) with Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Flaherty i.e., Flaherty and Flaherty Crumrine go up and down completely randomly.

Pair Corralation between Flaherty and Flaherty Crumrine

Considering the 90-day investment horizon Flaherty is expected to generate 1.24 times less return on investment than Flaherty Crumrine. In addition to that, Flaherty is 1.01 times more volatile than Flaherty Crumrine Preferred. It trades about 0.13 of its total potential returns per unit of risk. Flaherty Crumrine Preferred is currently generating about 0.16 per unit of volatility. If you would invest  1,517  in Flaherty Crumrine Preferred on December 29, 2024 and sell it today you would earn a total of  76.00  from holding Flaherty Crumrine Preferred or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Flaherty and Crumrine  vs.  Flaherty Crumrine Preferred

Flaherty and Crumrine

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty and Crumrine are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Flaherty is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Flaherty Crumrine

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Preferred are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Flaherty Crumrine is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Flaherty and Flaherty Crumrine

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

The idea behind Flaherty and Crumrine and Flaherty Crumrine Preferred 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.