Correlation Between Freeport and Vestis

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

Diversification Opportunities for Freeport and Vestis

-0.36

Correlation Coefficient

Freeport  Vestis

Very good diversification

The 3 months correlation between Freeport and Vestis is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan 455 percent and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Freeport i.e., Freeport and Vestis go up and down completely randomly.

Pair Corralation between Freeport and Vestis

Assuming the 90 days trading horizon Freeport McMoRan 455 percent is not expected to generate positive returns. However, Freeport McMoRan 455 percent is 11.9 times less risky than Vestis. It waists most of its returns potential to compensate for thr risk taken. Vestis is generating about 0.01 per unit of risk. If you would invest  1,904  in Vestis on September 24, 2024 and sell it today you would lose (265.00) from holding Vestis or give up 13.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.09%
Values	Daily Returns

Freeport McMoRan 455 percent  vs.  Vestis

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Vestis

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Freeport and Vestis

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

The idea behind Freeport McMoRan 455 percent and Vestis 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.