Correlation Between FMC and ODAS Elektrik

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

By analyzing existing cross correlation between FMC Corporation and ODAS Elektrik Uretim, you can compare the effects of market volatilities on FMC and ODAS Elektrik 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 ODAS Elektrik. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC and ODAS Elektrik.

Diversification Opportunities for FMC and ODAS Elektrik

-0.52

Correlation Coefficient

FMC  ODAS Elektrik

Excellent diversification

The 3 months correlation between FMC and ODAS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. and ODAS Elektrik Uretim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODAS Elektrik Uretim 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 ODAS Elektrik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODAS Elektrik Uretim has no effect on the direction of FMC i.e., FMC and ODAS Elektrik go up and down completely randomly.

Pair Corralation between FMC and ODAS Elektrik

Considering the 90-day investment horizon FMC Corporation is expected to under-perform the ODAS Elektrik. But the stock apears to be less risky and, when comparing its historical volatility, FMC Corporation is 1.36 times less risky than ODAS Elektrik. The stock trades about -0.06 of its potential returns per unit of risk. The ODAS Elektrik Uretim is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  924.00  in ODAS Elektrik Uretim on October 4, 2024 and sell it today you would lose (309.00) from holding ODAS Elektrik Uretim or give up 33.44% of portfolio value over 90 days.

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

FMC Corp.  vs.  ODAS Elektrik Uretim

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.

ODAS Elektrik Uretim

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ODAS Elektrik Uretim are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, ODAS Elektrik may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FMC and ODAS Elektrik

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

The idea behind FMC Corporation and ODAS Elektrik Uretim 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.