Correlation Between FNP Technologies and Odyssee Technologies

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

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

Diversification Opportunities for FNP Technologies and Odyssee Technologies

0.06

Correlation Coefficient

FNP Technologies  Odyssee Technologies

Significant diversification

The 3 months correlation between FNP and Odyssee is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding FNP Technologies SA and Odyssee Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssee Technologies and FNP 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 FNP Technologies SA are associated (or correlated) with Odyssee Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssee Technologies has no effect on the direction of FNP Technologies i.e., FNP Technologies and Odyssee Technologies go up and down completely randomly.

Pair Corralation between FNP Technologies and Odyssee Technologies

Assuming the 90 days trading horizon FNP Technologies SA is expected to under-perform the Odyssee Technologies. In addition to that, FNP Technologies is 1.81 times more volatile than Odyssee Technologies SA. It trades about -0.03 of its total potential returns per unit of risk. Odyssee Technologies SA is currently generating about -0.03 per unit of volatility. If you would invest  1,555  in Odyssee Technologies SA on October 11, 2024 and sell it today you would lose (40.00) from holding Odyssee Technologies SA or give up 2.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	3.38%
Values	Daily Returns

FNP Technologies SA  vs.  Odyssee Technologies SA

FNP Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Odyssee Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Odyssee Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with FNP Technologies and Odyssee Technologies

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

The idea behind FNP Technologies SA and Odyssee Technologies 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.