This module allows you to analyze existing cross correlation between Facebook and VeriSign. You can compare the effects of market volatilities on Facebook and VeriSign 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 VeriSign. See also your portfolio center. Please also check ongoing floating volatility patterns of Facebook and VeriSign.
Allowing for the 30-days total investment horizon, Facebook is expected to under-perform the VeriSign. In addition to that, Facebook is 3.82 times more volatile than VeriSign. It trades about -0.18 of its total potential returns per unit of risk. VeriSign is currently generating about 0.05 per unit of volatility. If you would invest 14,913 in VeriSign on July 21, 2018 and sell it today you would earn a total of 162.00 from holding VeriSign or generate 1.09% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Facebook Inc and VeriSign Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on VeriSign 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 VeriSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeriSign has no effect on the direction of Facebook i.e. Facebook and VeriSign go up and down completely randomly.
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