Correlation Between Feper SA and Aages SA

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

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

Diversification Opportunities for Feper SA and Aages SA

-0.44

Correlation Coefficient

Feper SA  Aages SA

Very good diversification

The 3 months correlation between Feper and Aages is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Feper SA and Aages SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aages SA and Feper SA 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 Feper SA are associated (or correlated) with Aages SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aages SA has no effect on the direction of Feper SA i.e., Feper SA and Aages SA go up and down completely randomly.

Pair Corralation between Feper SA and Aages SA

Assuming the 90 days trading horizon Feper SA is expected to under-perform the Aages SA. In addition to that, Feper SA is 4.03 times more volatile than Aages SA. It trades about -0.05 of its total potential returns per unit of risk. Aages SA is currently generating about -0.04 per unit of volatility. If you would invest  635.00  in Aages SA on October 24, 2024 and sell it today you would lose (5.00) from holding Aages SA or give up 0.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

Feper SA  vs.  Aages SA

Feper SA

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Feper SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Feper SA displayed solid returns over the last few months and may actually be approaching a breakup point.

Aages SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aages SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Feper SA and Aages SA

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

The idea behind Feper SA and Aages SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.