Correlation Between Fiducial Office and Broadpeak

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

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

Diversification Opportunities for Fiducial Office and Broadpeak

-0.72

Correlation Coefficient

Fiducial Office  Broadpeak

Pay attention - limited upside

The 3 months correlation between Fiducial and Broadpeak is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fiducial Office Solutions and Broadpeak SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadpeak SA and Fiducial Office 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 Fiducial Office Solutions are associated (or correlated) with Broadpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadpeak SA has no effect on the direction of Fiducial Office i.e., Fiducial Office and Broadpeak go up and down completely randomly.

Pair Corralation between Fiducial Office and Broadpeak

Assuming the 90 days trading horizon Fiducial Office Solutions is expected to generate 0.09 times more return on investment than Broadpeak. However, Fiducial Office Solutions is 11.46 times less risky than Broadpeak. It trades about 0.04 of its potential returns per unit of risk. Broadpeak SA is currently generating about -0.3 per unit of risk. If you would invest  2,780  in Fiducial Office Solutions on September 12, 2024 and sell it today you would earn a total of  20.00  from holding Fiducial Office Solutions or generate 0.72% return on investment over 90 days.

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

Fiducial Office Solutions  vs.  Broadpeak SA

Fiducial Office Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fiducial Office Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fiducial Office is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Broadpeak SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadpeak SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Fiducial Office and Broadpeak

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

The idea behind Fiducial Office Solutions and Broadpeak 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.