Correlation Between Fisher Paykel and Emetals

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

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

Diversification Opportunities for Fisher Paykel and Emetals

0.22

Correlation Coefficient

Fisher Paykel  Emetals

Modest diversification

The 3 months correlation between Fisher and Emetals is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and Emetals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emetals and Fisher Paykel 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 Fisher Paykel Healthcare are associated (or correlated) with Emetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emetals has no effect on the direction of Fisher Paykel i.e., Fisher Paykel and Emetals go up and down completely randomly.

Pair Corralation between Fisher Paykel and Emetals

Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to under-perform the Emetals. But the stock apears to be less risky and, when comparing its historical volatility, Fisher Paykel Healthcare is 6.44 times less risky than Emetals. The stock trades about -0.2 of its potential returns per unit of risk. The Emetals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.40  in Emetals on December 5, 2024 and sell it today you would earn a total of  0.00  from holding Emetals or generate 0.0% return on investment over 90 days.

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

Fisher Paykel Healthcare  vs.  Emetals

Fisher Paykel Healthcare

Risk-Adjusted Performance

Very Weak

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

Emetals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Emetals 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 Fisher Paykel and Emetals

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

The idea behind Fisher Paykel Healthcare and Emetals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.