Correlation Between Patria Latin and Futuretech

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

By analyzing existing cross correlation between Patria Latin American and Futuretech II Acquisition, you can compare the effects of market volatilities on Patria Latin and Futuretech 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 Patria Latin with a short position of Futuretech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Latin and Futuretech.

Diversification Opportunities for Patria Latin and Futuretech

0.24

Correlation Coefficient

Patria Latin  Futuretech

Modest diversification

The 3 months correlation between Patria and Futuretech is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Patria Latin American and Futuretech II Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuretech II Acquisition and Patria Latin 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 Patria Latin American are associated (or correlated) with Futuretech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuretech II Acquisition has no effect on the direction of Patria Latin i.e., Patria Latin and Futuretech go up and down completely randomly.

Pair Corralation between Patria Latin and Futuretech

Given the investment horizon of 90 days Patria Latin American is expected to generate 0.09 times more return on investment than Futuretech. However, Patria Latin American is 11.37 times less risky than Futuretech. It trades about 0.19 of its potential returns per unit of risk. Futuretech II Acquisition is currently generating about 0.01 per unit of risk. If you would invest  1,154  in Patria Latin American on September 3, 2024 and sell it today you would earn a total of  9.00  from holding Patria Latin American or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Patria Latin American  vs.  Futuretech II Acquisition

Patria Latin American

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Latin American are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Patria Latin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Futuretech II Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Futuretech II Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Futuretech is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Patria Latin and Futuretech

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

The idea behind Patria Latin American and Futuretech II Acquisition 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.