This module allows you to analyze existing cross correlation between Facebook and Harris Corporation. You can compare the effects of market volatilities on Facebook and Harris 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 Facebook with a short position of Harris. See also your portfolio center. Please also check ongoing floating volatility patterns of Facebook and Harris.
Allowing for the 30-days total investment horizon, Facebook is expected to generate 1.83 times more return on investment than Harris. However, Facebook is 1.83 times more volatile than Harris Corporation. It trades about 0.19 of its potential returns per unit of risk. Harris Corporation is currently generating about 0.26 per unit of risk. If you would invest 19,749 in Facebook on June 19, 2018 and sell it today you would earn a total of 1,187 from holding Facebook or generate 6.01% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Facebook Inc and Harris Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Harris and Facebook 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 Facebook are associated (or correlated) with Harris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harris has no effect on the direction of Facebook i.e. Facebook and Harris go up and down completely randomly.
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