Correlation Between Fair Oaks and Grand Vision

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

By analyzing existing cross correlation between Fair Oaks Income and Grand Vision Media, you can compare the effects of market volatilities on Fair Oaks and Grand Vision 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 Fair Oaks with a short position of Grand Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and Grand Vision.

Diversification Opportunities for Fair Oaks and Grand Vision

0.0

Correlation Coefficient

Fair Oaks  Grand Vision

Pay attention - limited upside

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

Pair Corralation between Fair Oaks and Grand Vision

Assuming the 90 days trading horizon Fair Oaks is expected to generate 7.43 times less return on investment than Grand Vision. But when comparing it to its historical volatility, Fair Oaks Income is 22.0 times less risky than Grand Vision. It trades about 0.09 of its potential returns per unit of risk. Grand Vision Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Grand Vision Media on October 4, 2024 and sell it today you would lose (27.00) from holding Grand Vision Media or give up 21.6% of portfolio value over 90 days.

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

Fair Oaks Income  vs.  Grand Vision Media

Fair Oaks Income

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Oaks Income are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fair Oaks is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Grand Vision Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Vision Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grand Vision is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fair Oaks and Grand Vision

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

The idea behind Fair Oaks Income and Grand Vision Media 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.