Correlation Between Femasys and Montana Technologies

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

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

Diversification Opportunities for Femasys and Montana Technologies

-0.43

Correlation Coefficient

Femasys  Montana Technologies

Very good diversification

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

Pair Corralation between Femasys and Montana Technologies

Given the investment horizon of 90 days Femasys is expected to generate 0.59 times more return on investment than Montana Technologies. However, Femasys is 1.71 times less risky than Montana Technologies. It trades about 0.08 of its potential returns per unit of risk. Montana Technologies is currently generating about -0.06 per unit of risk. If you would invest  110.00  in Femasys on December 30, 2024 and sell it today you would earn a total of  19.00  from holding Femasys or generate 17.27% return on investment over 90 days.

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

Femasys  vs.  Montana Technologies

Femasys

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Femasys showed solid returns over the last few months and may actually be approaching a breakup point.

Montana Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Montana Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Femasys and Montana Technologies

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

The idea behind Femasys and Montana Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.