Correlation Between FC Investment and Taylor Maritime

Can any of the company-specific risk be diversified away by investing in both FC Investment and Taylor Maritime 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 Taylor Maritime 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 Taylor Maritime Investments, you can compare the effects of market volatilities on FC Investment and Taylor Maritime 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 Taylor Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Taylor Maritime.

Diversification Opportunities for FC Investment and Taylor Maritime

-0.43

Correlation Coefficient

FC Investment  Taylor Maritime

Very good diversification

The 3 months correlation between FCIT and Taylor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Taylor Maritime Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Maritime Inve 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 Taylor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Maritime Inve has no effect on the direction of FC Investment i.e., FC Investment and Taylor Maritime go up and down completely randomly.

Pair Corralation between FC Investment and Taylor Maritime

Assuming the 90 days trading horizon FC Investment Trust is expected to under-perform the Taylor Maritime. But the stock apears to be less risky and, when comparing its historical volatility, FC Investment Trust is 1.99 times less risky than Taylor Maritime. The stock trades about -0.01 of its potential returns per unit of risk. The Taylor Maritime Investments is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7,600  in Taylor Maritime Investments on October 13, 2024 and sell it today you would earn a total of  460.00  from holding Taylor Maritime Investments or generate 6.05% return on investment over 90 days.

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

FC Investment Trust  vs.  Taylor Maritime 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.

Taylor Maritime Inve

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taylor Maritime Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Taylor Maritime is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FC Investment and Taylor Maritime

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

The idea behind FC Investment Trust and Taylor Maritime 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.