Correlation Between FIT INVEST and Din Capital

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

Diversification Opportunities for FIT INVEST and Din Capital

-0.01

Correlation Coefficient

FIT INVEST  Din Capital

Good diversification

The 3 months correlation between FIT and Din is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Din Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Din Capital Investment 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 Din Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Din Capital Investment has no effect on the direction of FIT INVEST i.e., FIT INVEST and Din Capital go up and down completely randomly.

Pair Corralation between FIT INVEST and Din Capital

Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.57 times more return on investment than Din Capital. However, FIT INVEST JSC is 1.74 times less risky than Din Capital. It trades about 0.16 of its potential returns per unit of risk. Din Capital Investment is currently generating about -0.07 per unit of risk. If you would invest  403,000  in FIT INVEST JSC on December 5, 2024 and sell it today you would earn a total of  14,000  from holding FIT INVEST JSC or generate 3.47% return on investment over 90 days.

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

FIT INVEST JSC  vs.  Din Capital Investment

FIT INVEST JSC

Risk-Adjusted Performance

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.

Din Capital Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with FIT INVEST and Din Capital

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

The idea behind FIT INVEST JSC and Din Capital Investment 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.