Correlation Between Fiducial Office and Media 6

Can any of the company-specific risk be diversified away by investing in both Fiducial Office and Media 6 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 Media 6 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 Media 6 SA, you can compare the effects of market volatilities on Fiducial Office and Media 6 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 Media 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiducial Office and Media 6.

Diversification Opportunities for Fiducial Office and Media 6

-0.44

Correlation Coefficient

Fiducial Office  Media 6

Very good diversification

The 3 months correlation between Fiducial and Media is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fiducial Office Solutions and Media 6 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media 6 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 Media 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media 6 SA has no effect on the direction of Fiducial Office i.e., Fiducial Office and Media 6 go up and down completely randomly.

Pair Corralation between Fiducial Office and Media 6

Assuming the 90 days trading horizon Fiducial Office Solutions is expected to generate 0.1 times more return on investment than Media 6. However, Fiducial Office Solutions is 10.11 times less risky than Media 6. It trades about -0.08 of its potential returns per unit of risk. Media 6 SA is currently generating about -0.02 per unit of risk. If you would invest  2,760  in Fiducial Office Solutions on December 1, 2024 and sell it today you would lose (20.00) from holding Fiducial Office Solutions or give up 0.72% of portfolio value over 90 days.

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

Fiducial Office Solutions  vs.  Media 6 SA

Fiducial Office Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiducial Office Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Media 6 SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Media 6 SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Media 6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fiducial Office and Media 6

The main advantage of trading using opposite Fiducial Office and Media 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiducial Office position performs unexpectedly, Media 6 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 Media 6 will offset losses from the drop in Media 6's long position.

The idea behind Fiducial Office Solutions and Media 6 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.