Correlation Between Financial Industries and Ffuyux

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

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

Diversification Opportunities for Financial Industries and Ffuyux

0.78

Correlation Coefficient

Financial Industries  Ffuyux

Poor diversification

The 3 months correlation between Financial and Ffuyux is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund and Ffuyux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ffuyux and Financial Industries 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 Financial Industries Fund are associated (or correlated) with Ffuyux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ffuyux has no effect on the direction of Financial Industries i.e., Financial Industries and Ffuyux go up and down completely randomly.

Pair Corralation between Financial Industries and Ffuyux

Assuming the 90 days horizon Financial Industries is expected to generate 24.02 times less return on investment than Ffuyux. But when comparing it to its historical volatility, Financial Industries Fund is 1.15 times less risky than Ffuyux. It trades about 0.01 of its potential returns per unit of risk. Ffuyux is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,008  in Ffuyux on May 15, 2025 and sell it today you would earn a total of  91.00  from holding Ffuyux or generate 9.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Financial Industries Fund  vs.  Ffuyux

Financial Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days Financial Industries Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Financial Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ffuyux

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ffuyux are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ffuyux may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Financial Industries and Ffuyux

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

The idea behind Financial Industries Fund and Ffuyux 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.