Correlation Between Fonix Mobile and Walmart

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

By analyzing existing cross correlation between Fonix Mobile plc and Walmart, you can compare the effects of market volatilities on Fonix Mobile and Walmart 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 Fonix Mobile with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonix Mobile and Walmart.

Diversification Opportunities for Fonix Mobile and Walmart

-0.02

Correlation Coefficient

Fonix Mobile  Walmart

Good diversification

The 3 months correlation between Fonix and Walmart is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fonix Mobile plc and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Fonix Mobile 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 Fonix Mobile plc are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Fonix Mobile i.e., Fonix Mobile and Walmart go up and down completely randomly.

Pair Corralation between Fonix Mobile and Walmart

Assuming the 90 days trading horizon Fonix Mobile plc is expected to generate 49.84 times more return on investment than Walmart. However, Fonix Mobile is 49.84 times more volatile than Walmart. It trades about 0.08 of its potential returns per unit of risk. Walmart is currently generating about 0.24 per unit of risk. If you would invest  21,550  in Fonix Mobile plc on October 8, 2024 and sell it today you would earn a total of  950.00  from holding Fonix Mobile plc or generate 4.41% return on investment over 90 days.

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

Fonix Mobile plc  vs.  Walmart

Fonix Mobile plc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fonix Mobile plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Fonix Mobile is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Walmart

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Walmart 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 Fonix Mobile and Walmart

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

The idea behind Fonix Mobile plc and Walmart 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.

Check out your portfolio center.

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.