Correlation Between Soc Franc and Ferm Casino

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

By analyzing existing cross correlation between Soc Franc Casinos and Ferm Casino Mun, you can compare the effects of market volatilities on Soc Franc and Ferm Casino 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 Soc Franc with a short position of Ferm Casino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soc Franc and Ferm Casino.

Diversification Opportunities for Soc Franc and Ferm Casino

-0.36

Correlation Coefficient

Soc Franc  Ferm Casino

Very good diversification

The 3 months correlation between Soc and Ferm is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Soc Franc Casinos and Ferm Casino Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferm Casino Mun and Soc Franc 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 Soc Franc Casinos are associated (or correlated) with Ferm Casino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferm Casino Mun has no effect on the direction of Soc Franc i.e., Soc Franc and Ferm Casino go up and down completely randomly.

Pair Corralation between Soc Franc and Ferm Casino

Assuming the 90 days trading horizon Soc Franc Casinos is expected to generate 2.16 times more return on investment than Ferm Casino. However, Soc Franc is 2.16 times more volatile than Ferm Casino Mun. It trades about 0.02 of its potential returns per unit of risk. Ferm Casino Mun is currently generating about 0.02 per unit of risk. If you would invest  148.00  in Soc Franc Casinos on September 18, 2024 and sell it today you would earn a total of  17.00  from holding Soc Franc Casinos or generate 11.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.77%
Values	Daily Returns

Soc Franc Casinos  vs.  Ferm Casino Mun

Soc Franc Casinos

Risk-Adjusted Performance

1 of 100

Weak

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

Ferm Casino Mun

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Soc Franc and Ferm Casino

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

The idea behind Soc Franc Casinos and Ferm Casino Mun 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.