Correlation Between Ferguson Plc and Grindr Warrant

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

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

Diversification Opportunities for Ferguson Plc and Grindr Warrant

-0.57

Correlation Coefficient

Ferguson Plc  Grindr Warrant

Excellent diversification

The 3 months correlation between Ferguson and Grindr is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ferguson Plc and Grindr Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindr Warrant and Ferguson Plc 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 Ferguson Plc are associated (or correlated) with Grindr Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindr Warrant has no effect on the direction of Ferguson Plc i.e., Ferguson Plc and Grindr Warrant go up and down completely randomly.

Pair Corralation between Ferguson Plc and Grindr Warrant

Given the investment horizon of 90 days Ferguson Plc is expected to under-perform the Grindr Warrant. But the stock apears to be less risky and, when comparing its historical volatility, Ferguson Plc is 2.5 times less risky than Grindr Warrant. The stock trades about -0.11 of its potential returns per unit of risk. The Grindr Warrant is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Grindr Warrant on October 13, 2024 and sell it today you would earn a total of  274.00  from holding Grindr Warrant or generate 78.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.55%
Values	Daily Returns

Ferguson Plc  vs.  Grindr Warrant

Ferguson Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ferguson Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Grindr Warrant

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grindr Warrant are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Grindr Warrant unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ferguson Plc and Grindr Warrant

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

The idea behind Ferguson Plc and Grindr Warrant 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.