Correlation Between Fonar and Rushnet

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

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

Diversification Opportunities for Fonar and Rushnet

-0.04

Correlation Coefficient

Fonar  Rushnet

Good diversification

The 3 months correlation between Fonar and Rushnet is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and Rushnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rushnet 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 Rushnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rushnet has no effect on the direction of Fonar i.e., Fonar and Rushnet go up and down completely randomly.

Pair Corralation between Fonar and Rushnet

Given the investment horizon of 90 days Fonar is expected to generate 153.24 times less return on investment than Rushnet. But when comparing it to its historical volatility, Fonar is 20.75 times less risky than Rushnet. It trades about 0.02 of its potential returns per unit of risk. Rushnet is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Rushnet on October 25, 2024 and sell it today you would lose (0.02) from holding Rushnet or give up 66.67% of portfolio value over 90 days.

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

Fonar  vs.  Rushnet

Fonar

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fonar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Rushnet

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rushnet are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical indicators, Rushnet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fonar and Rushnet

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

The idea behind Fonar and Rushnet 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.