Correlation Between Frp Holdings and Southcorp Capital

Can any of the company-specific risk be diversified away by investing in both Frp Holdings and Southcorp Capital 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 Southcorp Capital 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 Southcorp Capital, you can compare the effects of market volatilities on Frp Holdings and Southcorp Capital 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 Southcorp Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frp Holdings and Southcorp Capital.

Diversification Opportunities for Frp Holdings and Southcorp Capital

-0.21

Correlation Coefficient

Frp Holdings  Southcorp Capital

Very good diversification

The 3 months correlation between Frp and Southcorp is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Frp Holdings Ord and Southcorp Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southcorp Capital 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 Southcorp Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southcorp Capital has no effect on the direction of Frp Holdings i.e., Frp Holdings and Southcorp Capital go up and down completely randomly.

Pair Corralation between Frp Holdings and Southcorp Capital

Given the investment horizon of 90 days Frp Holdings is expected to generate 610.74 times less return on investment than Southcorp Capital. But when comparing it to its historical volatility, Frp Holdings Ord is 233.61 times less risky than Southcorp Capital. It trades about 0.11 of its potential returns per unit of risk. Southcorp Capital is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  0.24  in Southcorp Capital on September 13, 2024 and sell it today you would earn a total of  0.16  from holding Southcorp Capital or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Frp Holdings Ord  vs.  Southcorp Capital

Frp Holdings Ord

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Frp Holdings Ord are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Frp Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Southcorp Capital

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Southcorp Capital are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Southcorp Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Frp Holdings and Southcorp Capital

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

The idea behind Frp Holdings Ord and Southcorp Capital 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.