Correlation Between Public Power and Frigoglass SAIC

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

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

Diversification Opportunities for Public Power and Frigoglass SAIC

0.14

Correlation Coefficient

Public Power  Frigoglass SAIC

Average diversification

The 3 months correlation between Public and Frigoglass is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Public Power and Frigoglass SAIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frigoglass SAIC and Public Power 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 Public Power are associated (or correlated) with Frigoglass SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frigoglass SAIC has no effect on the direction of Public Power i.e., Public Power and Frigoglass SAIC go up and down completely randomly.

Pair Corralation between Public Power and Frigoglass SAIC

Assuming the 90 days trading horizon Public Power is expected to generate 0.3 times more return on investment than Frigoglass SAIC. However, Public Power is 3.32 times less risky than Frigoglass SAIC. It trades about 0.18 of its potential returns per unit of risk. Frigoglass SAIC is currently generating about 0.02 per unit of risk. If you would invest  1,213  in Public Power on December 29, 2024 and sell it today you would earn a total of  193.00  from holding Public Power or generate 15.91% return on investment over 90 days.

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

Public Power  vs.  Frigoglass SAIC

Public Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Frigoglass SAIC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Frigoglass SAIC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Frigoglass SAIC is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Public Power and Frigoglass SAIC

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

The idea behind Public Power and Frigoglass SAIC 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..