Correlation Between Intuit and Fernhill Corp

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

By analyzing existing cross correlation between Intuit Inc and Fernhill Corp, you can compare the effects of market volatilities on Intuit and Fernhill Corp 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 Intuit with a short position of Fernhill Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuit and Fernhill Corp.

Diversification Opportunities for Intuit and Fernhill Corp

0.12

Correlation Coefficient

Intuit  Fernhill Corp

Average diversification

The 3 months correlation between Intuit and Fernhill is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Fernhill Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fernhill Corp and Intuit 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 Intuit Inc are associated (or correlated) with Fernhill Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fernhill Corp has no effect on the direction of Intuit i.e., Intuit and Fernhill Corp go up and down completely randomly.

Pair Corralation between Intuit and Fernhill Corp

Given the investment horizon of 90 days Intuit Inc is expected to under-perform the Fernhill Corp. But the stock apears to be less risky and, when comparing its historical volatility, Intuit Inc is 6.49 times less risky than Fernhill Corp. The stock trades about -0.05 of its potential returns per unit of risk. The Fernhill Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.06  in Fernhill Corp on December 4, 2024 and sell it today you would lose (0.01) from holding Fernhill Corp or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Intuit Inc  vs.  Fernhill Corp

Intuit Inc

Risk-Adjusted Performance

Very Weak

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

Fernhill Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fernhill Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fernhill Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuit and Fernhill Corp

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

The idea behind Intuit Inc and Fernhill Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.