Correlation Between Fortress Income and Oasis Crescent

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

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

Diversification Opportunities for Fortress Income and Oasis Crescent

0.3

Correlation Coefficient

Fortress Income  Oasis Crescent

Weak diversification

The 3 months correlation between Fortress and Oasis is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Income and Oasis Crescent Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Crescent Property and Fortress Income 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 Fortress Income are associated (or correlated) with Oasis Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Crescent Property has no effect on the direction of Fortress Income i.e., Fortress Income and Oasis Crescent go up and down completely randomly.

Pair Corralation between Fortress Income and Oasis Crescent

Assuming the 90 days trading horizon Fortress Income is expected to generate 59.91 times less return on investment than Oasis Crescent. But when comparing it to its historical volatility, Fortress Income is 96.74 times less risky than Oasis Crescent. It trades about 0.16 of its potential returns per unit of risk. Oasis Crescent Property is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  200,000  in Oasis Crescent Property on October 9, 2024 and sell it today you would earn a total of  5,000  from holding Oasis Crescent Property or generate 2.5% return on investment over 90 days.

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

Fortress Income  vs.  Oasis Crescent Property

Fortress Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Income are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Fortress Income is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Oasis Crescent Property

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oasis Crescent Property are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Oasis Crescent is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fortress Income and Oasis Crescent

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

The idea behind Fortress Income and Oasis Crescent Property 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.