Correlation Between Fbc Hldg and Aritzia

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

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

Diversification Opportunities for Fbc Hldg and Aritzia

0.09

Correlation Coefficient

Fbc Hldg  Aritzia

Significant diversification

The 3 months correlation between Fbc and Aritzia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fbc Hldg and Aritzia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aritzia and Fbc Hldg 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 Fbc Hldg are associated (or correlated) with Aritzia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aritzia has no effect on the direction of Fbc Hldg i.e., Fbc Hldg and Aritzia go up and down completely randomly.

Pair Corralation between Fbc Hldg and Aritzia

Given the investment horizon of 90 days Fbc Hldg is expected to generate 36.07 times more return on investment than Aritzia. However, Fbc Hldg is 36.07 times more volatile than Aritzia. It trades about 0.11 of its potential returns per unit of risk. Aritzia is currently generating about 0.01 per unit of risk. If you would invest  0.01  in Fbc Hldg on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Fbc Hldg or generate 0.0% return on investment over 90 days.

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

Fbc Hldg  vs.  Aritzia

Fbc Hldg

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fbc Hldg are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Fbc Hldg exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aritzia

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Fbc Hldg and Aritzia

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

The idea behind Fbc Hldg and Aritzia 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.