Correlation Between FARM 51 and AVIS BUDGET

Can any of the company-specific risk be diversified away by investing in both FARM 51 and AVIS BUDGET 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 FARM 51 and AVIS BUDGET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FARM 51 GROUP and AVIS BUDGET GROUP, you can compare the effects of market volatilities on FARM 51 and AVIS BUDGET 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 FARM 51 with a short position of AVIS BUDGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and AVIS BUDGET.

Diversification Opportunities for FARM 51 and AVIS BUDGET

0.0

Correlation Coefficient

FARM 51  AVIS BUDGET

Pay attention - limited upside

The 3 months correlation between FARM and AVIS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and AVIS BUDGET GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIS BUDGET GROUP and FARM 51 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 FARM 51 GROUP are associated (or correlated) with AVIS BUDGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIS BUDGET GROUP has no effect on the direction of FARM 51 i.e., FARM 51 and AVIS BUDGET go up and down completely randomly.

Pair Corralation between FARM 51 and AVIS BUDGET

If you would invest  299.00  in FARM 51 GROUP on February 20, 2024 and sell it today you would earn a total of  49.00  from holding FARM 51 GROUP or generate 16.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FARM 51 GROUP  vs.  AVIS BUDGET GROUP

FARM 51 GROUP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FARM 51 GROUP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FARM 51 reported solid returns over the last few months and may actually be approaching a breakup point.

AVIS BUDGET GROUP

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AVIS BUDGET GROUP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AVIS BUDGET may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with FARM 51 and AVIS BUDGET

The main advantage of trading using opposite FARM 51 and AVIS BUDGET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, AVIS BUDGET 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 AVIS BUDGET will offset losses from the drop in AVIS BUDGET's long position.

The idea behind FARM 51 GROUP and AVIS BUDGET GROUP 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.