Correlation Between Fonar and Check Cap

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

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

Diversification Opportunities for Fonar and Check Cap

0.29

Correlation Coefficient

Fonar  Check Cap

Modest diversification

The 3 months correlation between Fonar and Check is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap and Fonar 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 Fonar are associated (or correlated) with Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Fonar i.e., Fonar and Check Cap go up and down completely randomly.

Pair Corralation between Fonar and Check Cap

Given the investment horizon of 90 days Fonar is expected to under-perform the Check Cap. But the stock apears to be less risky and, when comparing its historical volatility, Fonar is 6.1 times less risky than Check Cap. The stock trades about -0.04 of its potential returns per unit of risk. The Check Cap is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Check Cap on December 28, 2024 and sell it today you would lose (31.00) from holding Check Cap or give up 26.96% of portfolio value over 90 days.

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

Fonar  vs.  Check Cap

Fonar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fonar is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Check Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Check Cap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Check Cap is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Fonar and Check Cap

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

The idea behind Fonar and Check Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.