Correlation Between Movado and Fitell Ordinary

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

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

Diversification Opportunities for Movado and Fitell Ordinary

0.43

Correlation Coefficient

Movado  Fitell Ordinary

Very weak diversification

The 3 months correlation between Movado and Fitell is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Movado Group and Fitell Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitell Ordinary and Movado 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 Movado Group are associated (or correlated) with Fitell Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fitell Ordinary has no effect on the direction of Movado i.e., Movado and Fitell Ordinary go up and down completely randomly.

Pair Corralation between Movado and Fitell Ordinary

Considering the 90-day investment horizon Movado Group is expected to generate 0.12 times more return on investment than Fitell Ordinary. However, Movado Group is 8.04 times less risky than Fitell Ordinary. It trades about -0.11 of its potential returns per unit of risk. Fitell Ordinary is currently generating about -0.21 per unit of risk. If you would invest  1,960  in Movado Group on December 28, 2024 and sell it today you would lose (237.00) from holding Movado Group or give up 12.09% of portfolio value over 90 days.

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

Movado Group  vs.  Fitell Ordinary

Movado Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Movado Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Fitell Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fitell Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Movado and Fitell Ordinary

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

The idea behind Movado Group and Fitell Ordinary 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.