Correlation Between Strategic Investments and FANCL CORP

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

By analyzing existing cross correlation between Strategic Investments AS and FANCL P, you can compare the effects of market volatilities on Strategic Investments and FANCL CORP 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 Strategic Investments with a short position of FANCL CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and FANCL CORP.

Diversification Opportunities for Strategic Investments and FANCL CORP

0.0

Correlation Coefficient

Strategic Investments  FANCL CORP

Pay attention - limited upside

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

Pair Corralation between Strategic Investments and FANCL CORP

If you would invest  100,000,000  in FANCL P on September 21, 2024 and sell it today you would earn a total of  0.00  from holding FANCL P or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Strategic Investments AS  vs.  FANCL P

Strategic Investments

Risk-Adjusted Performance

0 of 100

Very Weak

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

FANCL CORP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Strategic Investments and FANCL CORP

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

The idea behind Strategic Investments AS and FANCL P 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.