Correlation Between Growth For and Feutune Light

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

By analyzing existing cross correlation between Growth For Good and Feutune Light Acquisition, you can compare the effects of market volatilities on Growth For and Feutune Light 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 Growth For with a short position of Feutune Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth For and Feutune Light.

Diversification Opportunities for Growth For and Feutune Light

-0.42

Correlation Coefficient

Growth For  Feutune Light

Very good diversification

The 3 months correlation between Growth and Feutune is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Growth For Good and Feutune Light Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feutune Light Acquisition and Growth For 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 Growth For Good are associated (or correlated) with Feutune Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feutune Light Acquisition has no effect on the direction of Growth For i.e., Growth For and Feutune Light go up and down completely randomly.

Pair Corralation between Growth For and Feutune Light

Given the investment horizon of 90 days Growth For Good is expected to generate 0.04 times more return on investment than Feutune Light. However, Growth For Good is 26.92 times less risky than Feutune Light. It trades about 0.18 of its potential returns per unit of risk. Feutune Light Acquisition is currently generating about -0.09 per unit of risk. If you would invest  1,020  in Growth For Good on October 5, 2024 and sell it today you would earn a total of  27.00  from holding Growth For Good or generate 2.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	27.86%
Values	Daily Returns

Growth For Good  vs.  Feutune Light Acquisition

Growth For Good

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Growth For Good has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Growth For is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Feutune Light Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Feutune Light Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Feutune Light is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Growth For and Feutune Light

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

The idea behind Growth For Good and Feutune Light Acquisition 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.