Correlation Between Fateh Sports and 786 Investment

Can any of the company-specific risk be diversified away by investing in both Fateh Sports and 786 Investment 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 Fateh Sports and 786 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fateh Sports Wear and 786 Investment Limited, you can compare the effects of market volatilities on Fateh Sports and 786 Investment 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 Fateh Sports with a short position of 786 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fateh Sports and 786 Investment.

Diversification Opportunities for Fateh Sports and 786 Investment

0.3

Correlation Coefficient

Fateh Sports  786 Investment

Weak diversification

The 3 months correlation between Fateh and 786 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fateh Sports Wear and 786 Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 786 Investment and Fateh Sports 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 Fateh Sports Wear are associated (or correlated) with 786 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 786 Investment has no effect on the direction of Fateh Sports i.e., Fateh Sports and 786 Investment go up and down completely randomly.

Pair Corralation between Fateh Sports and 786 Investment

Assuming the 90 days trading horizon Fateh Sports Wear is expected to under-perform the 786 Investment. But the stock apears to be less risky and, when comparing its historical volatility, Fateh Sports Wear is 1.71 times less risky than 786 Investment. The stock trades about -0.33 of its potential returns per unit of risk. The 786 Investment Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  721.00  in 786 Investment Limited on October 9, 2024 and sell it today you would earn a total of  154.00  from holding 786 Investment Limited or generate 21.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	47.37%
Values	Daily Returns

Fateh Sports Wear  vs.  786 Investment Limited

Fateh Sports Wear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fateh Sports Wear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

786 Investment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 786 Investment Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, 786 Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fateh Sports and 786 Investment

The main advantage of trading using opposite Fateh Sports and 786 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fateh Sports position performs unexpectedly, 786 Investment 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 786 Investment will offset losses from the drop in 786 Investment's long position.

The idea behind Fateh Sports Wear and 786 Investment Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.