Correlation Between Kaufman Et and FNP Technologies

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

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

Diversification Opportunities for Kaufman Et and FNP Technologies

-0.19

Correlation Coefficient

Kaufman Et  FNP Technologies

Good diversification

The 3 months correlation between Kaufman and FNP is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Kaufman Et i.e., Kaufman Et and FNP Technologies go up and down completely randomly.

Pair Corralation between Kaufman Et and FNP Technologies

Assuming the 90 days trading horizon Kaufman Et Broad is expected to generate 0.33 times more return on investment than FNP Technologies. However, Kaufman Et Broad is 3.07 times less risky than FNP Technologies. It trades about 0.04 of its potential returns per unit of risk. FNP Technologies SA is currently generating about -0.03 per unit of risk. If you would invest  2,353  in Kaufman Et Broad on September 19, 2024 and sell it today you would earn a total of  857.00  from holding Kaufman Et Broad or generate 36.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.07%
Values	Daily Returns

Kaufman Et Broad  vs.  FNP Technologies SA

Kaufman Et Broad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaufman Et Broad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Kaufman Et is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FNP Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FNP Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kaufman Et and FNP Technologies

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

The idea behind Kaufman Et Broad and FNP Technologies SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.