Correlation Between Four Leaf and FIAC Old

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

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

Diversification Opportunities for Four Leaf and FIAC Old

0.78

Correlation Coefficient

Four Leaf  FIAC Old

Poor diversification

The 3 months correlation between Four and FIAC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Four Leaf Acquisition and FIAC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIAC Old and Four Leaf 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 Four Leaf Acquisition are associated (or correlated) with FIAC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIAC Old has no effect on the direction of Four Leaf i.e., Four Leaf and FIAC Old go up and down completely randomly.

Pair Corralation between Four Leaf and FIAC Old

Assuming the 90 days horizon Four Leaf Acquisition is expected to generate 0.0 times more return on investment than FIAC Old. However, Four Leaf Acquisition is 2723.53 times less risky than FIAC Old. It trades about 0.13 of its potential returns per unit of risk. FIAC Old is currently generating about -0.05 per unit of risk. If you would invest  1,103  in Four Leaf Acquisition on October 10, 2024 and sell it today you would earn a total of  1.00  from holding Four Leaf Acquisition or generate 0.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	36.07%
Values	Daily Returns

Four Leaf Acquisition  vs.  FIAC Old

Four Leaf Acquisition

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Four Leaf Acquisition are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Four Leaf is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

FIAC Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIAC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Four Leaf and FIAC Old

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

The idea behind Four Leaf Acquisition and FIAC Old 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.