Correlation Between Avant Technologies and Futuris

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

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

Diversification Opportunities for Avant Technologies and Futuris

0.13

Correlation Coefficient

Avant Technologies  Futuris

Average diversification

The 3 months correlation between Avant and Futuris is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Avant Technologies and Futuris Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuris Company and Avant Technologies 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 Avant Technologies are associated (or correlated) with Futuris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuris Company has no effect on the direction of Avant Technologies i.e., Avant Technologies and Futuris go up and down completely randomly.

Pair Corralation between Avant Technologies and Futuris

Given the investment horizon of 90 days Avant Technologies is expected to generate 1.5 times less return on investment than Futuris. But when comparing it to its historical volatility, Avant Technologies is 2.26 times less risky than Futuris. It trades about 0.09 of its potential returns per unit of risk. Futuris Company is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1.70  in Futuris Company on April 29, 2025 and sell it today you would lose (0.02) from holding Futuris Company or give up 1.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Avant Technologies  vs.  Futuris Company

Avant Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Avant Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Avant Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Futuris Company

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Futuris Company are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Futuris unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Avant Technologies and Futuris

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

The idea behind Avant Technologies and Futuris Company 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.