Correlation Between Fulcrum Metals and Chocoladefabriken

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

By analyzing existing cross correlation between Fulcrum Metals PLC and Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Fulcrum Metals and Chocoladefabriken 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 Fulcrum Metals with a short position of Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Metals and Chocoladefabriken.

Diversification Opportunities for Fulcrum Metals and Chocoladefabriken

0.69

Correlation Coefficient

Fulcrum Metals  Chocoladefabriken

Poor diversification

The 3 months correlation between Fulcrum and Chocoladefabriken is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Metals PLC and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt and Fulcrum 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 Fulcrum Metals PLC are associated (or correlated) with Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Fulcrum Metals i.e., Fulcrum Metals and Chocoladefabriken go up and down completely randomly.

Pair Corralation between Fulcrum Metals and Chocoladefabriken

Assuming the 90 days trading horizon Fulcrum Metals PLC is expected to under-perform the Chocoladefabriken. In addition to that, Fulcrum Metals is 2.78 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about -0.12 of its total potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about -0.18 per unit of volatility. If you would invest  10,780,000  in Chocoladefabriken Lindt Spruengli on October 14, 2024 and sell it today you would lose (960,000) from holding Chocoladefabriken Lindt Spruengli or give up 8.91% of portfolio value over 90 days.

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

Fulcrum Metals PLC  vs.  Chocoladefabriken Lindt Spruen

Fulcrum Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Chocoladefabriken Lindt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chocoladefabriken Lindt Spruengli has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Fulcrum Metals and Chocoladefabriken

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

The idea behind Fulcrum Metals PLC and Chocoladefabriken Lindt Spruengli 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.