Correlation Between FIT INVEST and Camau Trading

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

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

Diversification Opportunities for FIT INVEST and Camau Trading

0.42

Correlation Coefficient

FIT INVEST  Camau Trading

Very weak diversification

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

Pair Corralation between FIT INVEST and Camau Trading

Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Camau Trading. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 4.6 times less risky than Camau Trading. The stock trades about -0.1 of its potential returns per unit of risk. The Camau Trading JSC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  900,000  in Camau Trading JSC on October 22, 2024 and sell it today you would earn a total of  20,000  from holding Camau Trading JSC or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	51.56%
Values	Daily Returns

FIT INVEST JSC  vs.  Camau Trading JSC

FIT INVEST JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIT INVEST JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, FIT INVEST is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Camau Trading JSC

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Camau Trading JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Camau Trading may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FIT INVEST and Camau Trading

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

The idea behind FIT INVEST JSC and Camau Trading JSC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.