Correlation Between FMC and TWFG,

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

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

Diversification Opportunities for FMC and TWFG,

0.2

Correlation Coefficient

FMC  TWFG,

Modest diversification

The 3 months correlation between FMC and TWFG, is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A 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 TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of FMC i.e., FMC and TWFG, go up and down completely randomly.

Pair Corralation between FMC and TWFG,

Considering the 90-day investment horizon FMC Corporation is expected to under-perform the TWFG,. But the stock apears to be less risky and, when comparing its historical volatility, FMC Corporation is 1.23 times less risky than TWFG,. The stock trades about -0.33 of its potential returns per unit of risk. The TWFG, Class A is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  3,375  in TWFG, Class A on October 6, 2024 and sell it today you would lose (405.00) from holding TWFG, Class A or give up 12.0% of portfolio value over 90 days.

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

FMC Corp.  vs.  TWFG, Class A

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.

TWFG, Class A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, TWFG, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FMC and TWFG,

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

The idea behind FMC Corporation and TWFG, Class A 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 Commodity Directory module to find actively traded commodities issued by global exchanges.