Correlation Between Futuretech and Patria Latin

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

By analyzing existing cross correlation between Futuretech II Acquisition and Patria Latin American, you can compare the effects of market volatilities on Futuretech and Patria Latin 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 Futuretech with a short position of Patria Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futuretech and Patria Latin.

Diversification Opportunities for Futuretech and Patria Latin

-0.57

Correlation Coefficient

Futuretech  Patria Latin

Excellent diversification

The 3 months correlation between Futuretech and Patria is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Futuretech II Acquisition and Patria Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Latin American and Futuretech 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 Futuretech II Acquisition are associated (or correlated) with Patria Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Latin American has no effect on the direction of Futuretech i.e., Futuretech and Patria Latin go up and down completely randomly.

Pair Corralation between Futuretech and Patria Latin

Assuming the 90 days horizon Futuretech II Acquisition is expected to under-perform the Patria Latin. In addition to that, Futuretech is 9.85 times more volatile than Patria Latin American. It trades about -0.04 of its total potential returns per unit of risk. Patria Latin American is currently generating about 0.32 per unit of volatility. If you would invest  1,175  in Patria Latin American on December 10, 2024 and sell it today you would earn a total of  14.00  from holding Patria Latin American or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Futuretech II Acquisition  vs.  Patria Latin American

Futuretech II Acquisition

Risk-Adjusted Performance

Very Weak

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

Patria Latin American

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Latin American are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Patria Latin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Futuretech and Patria Latin

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

The idea behind Futuretech II Acquisition and Patria Latin American 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..