Correlation Between Fateh Sports and Oil

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

Diversification Opportunities for Fateh Sports and Oil

0.18

Correlation Coefficient

Fateh Sports  Oil

Average diversification

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

Pair Corralation between Fateh Sports and Oil

Assuming the 90 days trading horizon Fateh Sports Wear is expected to under-perform the Oil. In addition to that, Fateh Sports is 1.27 times more volatile than Oil and Gas. It trades about -0.29 of its total potential returns per unit of risk. Oil and Gas is currently generating about -0.13 per unit of volatility. If you would invest  23,259  in Oil and Gas on October 24, 2024 and sell it today you would lose (1,436) from holding Oil and Gas or give up 6.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Fateh Sports Wear  vs.  Oil and Gas

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.

Oil and Gas

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oil and Gas are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Oil sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fateh Sports and Oil

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

The idea behind Fateh Sports Wear and Oil and Gas 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.