Correlation Between FANH Old and Brown Brown

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

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

Diversification Opportunities for FANH Old and Brown Brown

-0.38

Correlation Coefficient

FANH Old  Brown Brown

Very good diversification

The 3 months correlation between FANH and Brown is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FANH Old and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown and FANH Old 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 FANH Old are associated (or correlated) with Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of FANH Old i.e., FANH Old and Brown Brown go up and down completely randomly.

Pair Corralation between FANH Old and Brown Brown

If you would invest  151.00  in FANH Old on October 25, 2024 and sell it today you would earn a total of  0.00  from holding FANH Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.63%
Values	Daily Returns

FANH Old  vs.  Brown Brown

FANH Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FANH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, FANH Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Brown Brown

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brown Brown are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Brown Brown is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FANH Old and Brown Brown

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

The idea behind FANH Old and Brown Brown 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.