Correlation Between FORTEC ELEKTRONIK and PICKN PAY

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

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

Diversification Opportunities for FORTEC ELEKTRONIK and PICKN PAY

0.42

Correlation Coefficient

FORTEC ELEKTRONIK  PICKN PAY

Very weak diversification

The 3 months correlation between FORTEC and PICKN is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding FORTEC ELEKTRONIK and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES and FORTEC ELEKTRONIK 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 FORTEC ELEKTRONIK are associated (or correlated) with PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of FORTEC ELEKTRONIK i.e., FORTEC ELEKTRONIK and PICKN PAY go up and down completely randomly.

Pair Corralation between FORTEC ELEKTRONIK and PICKN PAY

Assuming the 90 days trading horizon FORTEC ELEKTRONIK is expected to generate 1.35 times more return on investment than PICKN PAY. However, FORTEC ELEKTRONIK is 1.35 times more volatile than PICKN PAY STORES. It trades about 0.02 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.01 per unit of risk. If you would invest  1,930  in FORTEC ELEKTRONIK on October 11, 2024 and sell it today you would earn a total of  10.00  from holding FORTEC ELEKTRONIK or generate 0.52% return on investment over 90 days.

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

FORTEC ELEKTRONIK  vs.  PICKN PAY STORES

FORTEC ELEKTRONIK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FORTEC ELEKTRONIK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, FORTEC ELEKTRONIK is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

PICKN PAY STORES

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PICKN PAY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FORTEC ELEKTRONIK and PICKN PAY

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

The idea behind FORTEC ELEKTRONIK and PICKN PAY STORES 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 Anywhere module to track or share privately all of your investments from the convenience of any device.