Correlation Between FIT INVEST and Industrial Urban

Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Industrial Urban 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 Industrial Urban 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 Industrial Urban Development, you can compare the effects of market volatilities on FIT INVEST and Industrial Urban 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 Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Industrial Urban.

Diversification Opportunities for FIT INVEST and Industrial Urban

0.45

Correlation Coefficient

FIT INVEST  Industrial Urban

Very weak diversification

The 3 months correlation between FIT and Industrial is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev 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 Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of FIT INVEST i.e., FIT INVEST and Industrial Urban go up and down completely randomly.

Pair Corralation between FIT INVEST and Industrial Urban

Assuming the 90 days trading horizon FIT INVEST is expected to generate 2.9 times less return on investment than Industrial Urban. But when comparing it to its historical volatility, FIT INVEST JSC is 1.23 times less risky than Industrial Urban. It trades about 0.14 of its potential returns per unit of risk. Industrial Urban Development is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  3,160,000  in Industrial Urban Development on December 29, 2024 and sell it today you would earn a total of  1,080,000  from holding Industrial Urban Development or generate 34.18% return on investment over 90 days.

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

FIT INVEST JSC  vs.  Industrial Urban Development

FIT INVEST JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIT INVEST JSC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FIT INVEST may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Industrial Urban Dev

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Urban Development are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Industrial Urban displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIT INVEST and Industrial Urban

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

The idea behind FIT INVEST JSC and Industrial Urban Development 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.