Correlation Between FC Investment and Oakley Capital

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

By analyzing existing cross correlation between FC Investment Trust and Oakley Capital Investments, you can compare the effects of market volatilities on FC Investment and Oakley Capital 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 FC Investment with a short position of Oakley Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Oakley Capital.

Diversification Opportunities for FC Investment and Oakley Capital

-0.34

Correlation Coefficient

FC Investment  Oakley Capital

Very good diversification

The 3 months correlation between FCIT and Oakley is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Oakley Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakley Capital Inves and FC Investment 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 FC Investment Trust are associated (or correlated) with Oakley Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakley Capital Inves has no effect on the direction of FC Investment i.e., FC Investment and Oakley Capital go up and down completely randomly.

Pair Corralation between FC Investment and Oakley Capital

Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.8 times more return on investment than Oakley Capital. However, FC Investment Trust is 1.24 times less risky than Oakley Capital. It trades about -0.01 of its potential returns per unit of risk. Oakley Capital Investments is currently generating about -0.05 per unit of risk. If you would invest  112,832  in FC Investment Trust on October 13, 2024 and sell it today you would lose (232.00) from holding FC Investment Trust or give up 0.21% of portfolio value over 90 days.

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

FC Investment Trust  vs.  Oakley Capital Investments

FC Investment Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FC Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Oakley Capital Inves

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oakley Capital Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Oakley Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FC Investment and Oakley Capital

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

The idea behind FC Investment Trust and Oakley Capital Investments 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.