Correlation Between Fluor and Sare Holding

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

By analyzing existing cross correlation between Fluor and Sare Holding SAB, you can compare the effects of market volatilities on Fluor and Sare Holding 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 Fluor with a short position of Sare Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluor and Sare Holding.

Diversification Opportunities for Fluor and Sare Holding

-1.0

Correlation Coefficient

Fluor  Sare Holding

Pay attention - limited upside

The 3 months correlation between Fluor and Sare is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and Sare Holding SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sare Holding SAB and Fluor 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 Fluor are associated (or correlated) with Sare Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sare Holding SAB has no effect on the direction of Fluor i.e., Fluor and Sare Holding go up and down completely randomly.

Pair Corralation between Fluor and Sare Holding

If you would invest  0.90  in Sare Holding SAB on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Sare Holding SAB or generate 0.0% return on investment over 90 days.

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

Fluor  vs.  Sare Holding SAB

Fluor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fluor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sare Holding SAB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Fluor and Sare Holding

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

The idea behind Fluor and Sare Holding SAB 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.