Correlation Between Foncire 7 and Mediantechn

Can any of the company-specific risk be diversified away by investing in both Foncire 7 and Mediantechn 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 Foncire 7 and Mediantechn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Foncire 7 investissement and Mediantechn, you can compare the effects of market volatilities on Foncire 7 and Mediantechn 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 Foncire 7 with a short position of Mediantechn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foncire 7 and Mediantechn.

Diversification Opportunities for Foncire 7 and Mediantechn

0.02

Correlation Coefficient

Foncire 7  Mediantechn

Significant diversification

The 3 months correlation between Foncire and Mediantechn is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Foncire 7 investissement and Mediantechn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediantechn and Foncire 7 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 Foncire 7 investissement are associated (or correlated) with Mediantechn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediantechn has no effect on the direction of Foncire 7 i.e., Foncire 7 and Mediantechn go up and down completely randomly.

Pair Corralation between Foncire 7 and Mediantechn

Assuming the 90 days trading horizon Foncire 7 investissement is expected to under-perform the Mediantechn. In addition to that, Foncire 7 is 1.4 times more volatile than Mediantechn. It trades about -0.08 of its total potential returns per unit of risk. Mediantechn is currently generating about 0.09 per unit of volatility. If you would invest  384.00  in Mediantechn on October 25, 2024 and sell it today you would earn a total of  85.00  from holding Mediantechn or generate 22.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Foncire 7 investissement  vs.  Mediantechn

Foncire 7 investissement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foncire 7 investissement 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Mediantechn

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mediantechn are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mediantechn reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foncire 7 and Mediantechn

The main advantage of trading using opposite Foncire 7 and Mediantechn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foncire 7 position performs unexpectedly, Mediantechn 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 Mediantechn will offset losses from the drop in Mediantechn's long position.

The idea behind Foncire 7 investissement and Mediantechn 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.