Correlation Between Fulcrum Therapeutics and SCHLUMBERGER

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

By analyzing existing cross correlation between Fulcrum Therapeutics and SCHLUMBERGER INVESTMENT SA, you can compare the effects of market volatilities on Fulcrum Therapeutics and SCHLUMBERGER 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 Fulcrum Therapeutics with a short position of SCHLUMBERGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Therapeutics and SCHLUMBERGER.

Diversification Opportunities for Fulcrum Therapeutics and SCHLUMBERGER

-0.58

Correlation Coefficient

Fulcrum Therapeutics  SCHLUMBERGER

Excellent diversification

The 3 months correlation between Fulcrum and SCHLUMBERGER is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Therapeutics and SCHLUMBERGER INVESTMENT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHLUMBERGER INVESTMENT and Fulcrum Therapeutics 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 Fulcrum Therapeutics are associated (or correlated) with SCHLUMBERGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHLUMBERGER INVESTMENT has no effect on the direction of Fulcrum Therapeutics i.e., Fulcrum Therapeutics and SCHLUMBERGER go up and down completely randomly.

Pair Corralation between Fulcrum Therapeutics and SCHLUMBERGER

Given the investment horizon of 90 days Fulcrum Therapeutics is expected to generate 7.67 times more return on investment than SCHLUMBERGER. However, Fulcrum Therapeutics is 7.67 times more volatile than SCHLUMBERGER INVESTMENT SA. It trades about 0.27 of its potential returns per unit of risk. SCHLUMBERGER INVESTMENT SA is currently generating about -0.44 per unit of risk. If you would invest  401.00  in Fulcrum Therapeutics on October 8, 2024 and sell it today you would earn a total of  107.00  from holding Fulcrum Therapeutics or generate 26.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Fulcrum Therapeutics  vs.  SCHLUMBERGER INVESTMENT SA

Fulcrum Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fulcrum Therapeutics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, Fulcrum Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

SCHLUMBERGER INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHLUMBERGER INVESTMENT SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SCHLUMBERGER INVESTMENT SA investors.

Pair Trading with Fulcrum Therapeutics and SCHLUMBERGER

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

The idea behind Fulcrum Therapeutics and SCHLUMBERGER INVESTMENT SA 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.