Correlation Between Frp Holdings and CoStar

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

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

Diversification Opportunities for Frp Holdings and CoStar

-0.18

Correlation Coefficient

Frp Holdings  CoStar

Good diversification

The 3 months correlation between Frp and CoStar is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Frp Holdings Ord and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group and Frp Holdings 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 Frp Holdings Ord are associated (or correlated) with CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of Frp Holdings i.e., Frp Holdings and CoStar go up and down completely randomly.

Pair Corralation between Frp Holdings and CoStar

Given the investment horizon of 90 days Frp Holdings Ord is expected to under-perform the CoStar. But the stock apears to be less risky and, when comparing its historical volatility, Frp Holdings Ord is 1.21 times less risky than CoStar. The stock trades about -0.03 of its potential returns per unit of risk. The CoStar Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,222  in CoStar Group on December 27, 2024 and sell it today you would earn a total of  801.00  from holding CoStar Group or generate 11.09% return on investment over 90 days.

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

Frp Holdings Ord  vs.  CoStar Group

Frp Holdings Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frp Holdings Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Frp Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

CoStar Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CoStar Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, CoStar may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Frp Holdings and CoStar

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

The idea behind Frp Holdings Ord and CoStar Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.