Correlation Between Newegg Commerce and Fitell Ordinary

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Can any of the company-specific risk be diversified away by investing in both Newegg Commerce 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 Newegg Commerce and Fitell Ordinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newegg Commerce and Fitell Ordinary, you can compare the effects of market volatilities on Newegg Commerce 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 Newegg Commerce with a short position of Fitell Ordinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newegg Commerce and Fitell Ordinary.

Diversification Opportunities for Newegg Commerce and Fitell Ordinary

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Newegg and Fitell is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Newegg Commerce and Fitell Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitell Ordinary and Newegg Commerce 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 Newegg Commerce 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 Newegg Commerce i.e., Newegg Commerce and Fitell Ordinary go up and down completely randomly.

Pair Corralation between Newegg Commerce and Fitell Ordinary

Given the investment horizon of 90 days Newegg Commerce is expected to under-perform the Fitell Ordinary. But the stock apears to be less risky and, when comparing its historical volatility, Newegg Commerce is 3.03 times less risky than Fitell Ordinary. The stock trades about -0.1 of its potential returns per unit of risk. The Fitell Ordinary is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,500  in Fitell Ordinary on September 2, 2024 and sell it today you would earn a total of  1,363  from holding Fitell Ordinary or generate 90.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Newegg Commerce  vs.  Fitell Ordinary

 Performance 
       Timeline  
Newegg Commerce 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Newegg Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Fitell Ordinary 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fitell Ordinary are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Fitell Ordinary disclosed solid returns over the last few months and may actually be approaching a breakup point.

Newegg Commerce and Fitell Ordinary Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Newegg Commerce and Fitell Ordinary

The main advantage of trading using opposite Newegg Commerce and Fitell Ordinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newegg Commerce 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 Newegg Commerce 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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