Correlation Between Finatis Socit and Logic Instrume

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

By analyzing existing cross correlation between Finatis Socit Anonyme and Logic Instrume, you can compare the effects of market volatilities on Finatis Socit and Logic Instrume 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 Finatis Socit with a short position of Logic Instrume. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finatis Socit and Logic Instrume.

Diversification Opportunities for Finatis Socit and Logic Instrume

-0.58

Correlation Coefficient

Finatis Socit  Logic Instrume

Excellent diversification

The 3 months correlation between Finatis and Logic is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Finatis Socit Anonyme and Logic Instrume in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logic Instrume and Finatis Socit 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 Finatis Socit Anonyme are associated (or correlated) with Logic Instrume. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logic Instrume has no effect on the direction of Finatis Socit i.e., Finatis Socit and Logic Instrume go up and down completely randomly.

Pair Corralation between Finatis Socit and Logic Instrume

Assuming the 90 days trading horizon Finatis Socit Anonyme is expected to under-perform the Logic Instrume. In addition to that, Finatis Socit is 1.32 times more volatile than Logic Instrume. It trades about -0.14 of its total potential returns per unit of risk. Logic Instrume is currently generating about 0.1 per unit of volatility. If you would invest  91.00  in Logic Instrume on February 4, 2024 and sell it today you would earn a total of  25.00  from holding Logic Instrume or generate 27.47% return on investment over 90 days.

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

Finatis Socit Anonyme  vs.  Logic Instrume

Finatis Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finatis Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Logic Instrume

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logic Instrume are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Logic Instrume reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Finatis Socit and Logic Instrume

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

The idea behind Finatis Socit Anonyme and Logic Instrume 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.