Correlation Between FD Technologies and Donegal Investment

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

By analyzing existing cross correlation between FD Technologies PLC and Donegal Investment Group, you can compare the effects of market volatilities on FD Technologies and Donegal 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 FD Technologies with a short position of Donegal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FD Technologies and Donegal Investment.

Diversification Opportunities for FD Technologies and Donegal Investment

0.15

Correlation Coefficient

FD Technologies  Donegal Investment

Average diversification

The 3 months correlation between GYQ and Donegal is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding FD Technologies PLC and Donegal Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Investment and FD Technologies 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 FD Technologies PLC are associated (or correlated) with Donegal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Investment has no effect on the direction of FD Technologies i.e., FD Technologies and Donegal Investment go up and down completely randomly.

Pair Corralation between FD Technologies and Donegal Investment

If you would invest  1,650  in Donegal Investment Group on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Donegal Investment Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FD Technologies PLC  vs.  Donegal Investment Group

FD Technologies PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FD Technologies PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, FD Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Donegal Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Donegal Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Donegal Investment is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with FD Technologies and Donegal Investment

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

The idea behind FD Technologies PLC and Donegal Investment Group 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 CEOs Directory module to screen CEOs from public companies around the world.