Correlation Between Freeport and Everspin Technologies

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

By analyzing existing cross correlation between Freeport McMoRan 455 percent and Everspin Technologies, you can compare the effects of market volatilities on Freeport and Everspin Technologies 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 Freeport with a short position of Everspin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport and Everspin Technologies.

Diversification Opportunities for Freeport and Everspin Technologies

-0.26

Correlation Coefficient

Freeport  Everspin Technologies

Very good diversification

The 3 months correlation between Freeport and Everspin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan 455 percent and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies and Freeport 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 Freeport McMoRan 455 percent are associated (or correlated) with Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Freeport i.e., Freeport and Everspin Technologies go up and down completely randomly.

Pair Corralation between Freeport and Everspin Technologies

Assuming the 90 days trading horizon Freeport McMoRan 455 percent is expected to under-perform the Everspin Technologies. But the bond apears to be less risky and, when comparing its historical volatility, Freeport McMoRan 455 percent is 9.84 times less risky than Everspin Technologies. The bond trades about -0.71 of its potential returns per unit of risk. The Everspin Technologies is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  590.00  in Everspin Technologies on September 19, 2024 and sell it today you would earn a total of  47.00  from holding Everspin Technologies or generate 7.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	9.09%
Values	Daily Returns

Freeport McMoRan 455 percent  vs.  Everspin Technologies

Freeport McMoRan 455

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freeport McMoRan 455 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Freeport is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Everspin Technologies

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Everspin Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Freeport and Everspin Technologies

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

The idea behind Freeport McMoRan 455 percent and Everspin Technologies 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.