Correlation Between FMC and INPOST SA

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

By analyzing existing cross correlation between FMC Corporation and INPOST SA EO, you can compare the effects of market volatilities on FMC and INPOST SA 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 FMC with a short position of INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC and INPOST SA.

Diversification Opportunities for FMC and INPOST SA

0.64

Correlation Coefficient

FMC  INPOST SA

Poor diversification

The 3 months correlation between FMC and INPOST is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO and FMC 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 FMC Corporation are associated (or correlated) with INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of FMC i.e., FMC and INPOST SA go up and down completely randomly.

Pair Corralation between FMC and INPOST SA

Considering the 90-day investment horizon FMC Corporation is expected to under-perform the INPOST SA. In addition to that, FMC is 1.18 times more volatile than INPOST SA EO. It trades about -0.06 of its total potential returns per unit of risk. INPOST SA EO is currently generating about 0.08 per unit of volatility. If you would invest  855.00  in INPOST SA EO on October 5, 2024 and sell it today you would earn a total of  798.00  from holding INPOST SA EO or generate 93.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.17%
Values	Daily Returns

FMC Corp.  vs.  INPOST SA EO

FMC Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FMC Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

INPOST SA EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INPOST SA EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INPOST SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FMC and INPOST SA

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

The idea behind FMC Corporation and INPOST SA EO 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.