Correlation Between Future Metals and 4Imprint Group

Can any of the company-specific risk be diversified away by investing in both Future Metals and 4Imprint Group 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 Future Metals and 4Imprint Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Future Metals NL and 4Imprint Group Plc, you can compare the effects of market volatilities on Future Metals and 4Imprint Group 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 Future Metals with a short position of 4Imprint Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Metals and 4Imprint Group.

Diversification Opportunities for Future Metals and 4Imprint Group

-0.42

Correlation Coefficient

Future Metals  4Imprint Group

Very good diversification

The 3 months correlation between Future and 4Imprint is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Future Metals NL and 4Imprint Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4Imprint Group Plc and Future Metals 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 Future Metals NL are associated (or correlated) with 4Imprint Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4Imprint Group Plc has no effect on the direction of Future Metals i.e., Future Metals and 4Imprint Group go up and down completely randomly.

Pair Corralation between Future Metals and 4Imprint Group

Assuming the 90 days trading horizon Future Metals NL is expected to under-perform the 4Imprint Group. In addition to that, Future Metals is 2.14 times more volatile than 4Imprint Group Plc. It trades about -0.04 of its total potential returns per unit of risk. 4Imprint Group Plc is currently generating about 0.03 per unit of volatility. If you would invest  402,816  in 4Imprint Group Plc on December 2, 2024 and sell it today you would earn a total of  117,184  from holding 4Imprint Group Plc or generate 29.09% return on investment over 90 days.

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

Future Metals NL  vs.  4Imprint Group Plc

Future Metals NL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Future Metals NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

4Imprint Group Plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 4Imprint Group Plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, 4Imprint Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Future Metals and 4Imprint Group

The main advantage of trading using opposite Future Metals and 4Imprint Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Metals position performs unexpectedly, 4Imprint Group 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 4Imprint Group will offset losses from the drop in 4Imprint Group's long position.

The idea behind Future Metals NL and 4Imprint Group Plc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.