Correlation Between Step One and Fisher Paykel

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Can any of the company-specific risk be diversified away by investing in both Step One and Fisher Paykel 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 Step One and Fisher Paykel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and Fisher Paykel Healthcare, you can compare the effects of market volatilities on Step One and Fisher Paykel 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 Step One with a short position of Fisher Paykel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Fisher Paykel.

Diversification Opportunities for Step One and Fisher Paykel

StepFisherDiversified AwayStepFisherDiversified Away100%
-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Step and Fisher is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and Fisher Paykel Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Paykel Healthcare and Step One 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 Step One Clothing are associated (or correlated) with Fisher Paykel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Paykel Healthcare has no effect on the direction of Step One i.e., Step One and Fisher Paykel go up and down completely randomly.

Pair Corralation between Step One and Fisher Paykel

Assuming the 90 days trading horizon Step One Clothing is expected to under-perform the Fisher Paykel. In addition to that, Step One is 1.75 times more volatile than Fisher Paykel Healthcare. It trades about -0.18 of its total potential returns per unit of risk. Fisher Paykel Healthcare is currently generating about 0.03 per unit of volatility. If you would invest  3,410  in Fisher Paykel Healthcare on September 19, 2024 and sell it today you would earn a total of  60.00  from holding Fisher Paykel Healthcare or generate 1.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Step One Clothing  vs.  Fisher Paykel Healthcare

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -25-20-15-10-50510
JavaScript chart by amCharts 3.21.15STP FPH
       Timeline  
Step One Clothing 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Step One Clothing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.31.41.51.61.71.81.9
Fisher Paykel Healthcare 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Paykel Healthcare are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Fisher Paykel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec3131.53232.53333.53434.535

Step One and Fisher Paykel Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.79-3.59-2.39-1.180.01.032.093.144.19 0.050.100.15
JavaScript chart by amCharts 3.21.15STP FPH
       Returns  

Pair Trading with Step One and Fisher Paykel

The main advantage of trading using opposite Step One and Fisher Paykel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One position performs unexpectedly, Fisher Paykel 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 Fisher Paykel will offset losses from the drop in Fisher Paykel's long position.
The idea behind Step One Clothing and Fisher Paykel Healthcare 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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