Correlation Between Iron Mountain and Fras Le

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

By analyzing existing cross correlation between Iron Mountain Incorporated and Fras le SA, you can compare the effects of market volatilities on Iron Mountain and Fras Le 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 Iron Mountain with a short position of Fras Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Fras Le.

Diversification Opportunities for Iron Mountain and Fras Le

-0.92

Correlation Coefficient

Iron Mountain  Fras Le

Pay attention - limited upside

The 3 months correlation between Iron and Fras is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Fras le SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fras le SA and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Fras Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fras le SA has no effect on the direction of Iron Mountain i.e., Iron Mountain and Fras Le go up and down completely randomly.

Pair Corralation between Iron Mountain and Fras Le

Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to under-perform the Fras Le. In addition to that, Iron Mountain is 1.39 times more volatile than Fras le SA. It trades about -0.25 of its total potential returns per unit of risk. Fras le SA is currently generating about 0.44 per unit of volatility. If you would invest  2,025  in Fras le SA on December 23, 2024 and sell it today you would earn a total of  720.00  from holding Fras le SA or generate 35.56% return on investment over 90 days.

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

Iron Mountain Incorporated  vs.  Fras le SA

Iron Mountain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iron Mountain Incorporated 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Fras le SA

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fras le SA are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fras Le unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iron Mountain and Fras Le

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

The idea behind Iron Mountain Incorporated and Fras le 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.