Correlation Between Fitbit and Golf
Can any of the company-specific risk be diversified away by investing in both Fitbit and Golf 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 Fitbit and Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fitbit Inc and Golf Co Group, you can compare the effects of market volatilities on Fitbit and Golf 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 Fitbit with a short position of Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fitbit and Golf.
Diversification Opportunities for Fitbit and Golf
Pay attention - limited upside
The 3 months correlation between Fitbit and Golf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fitbit Inc and Golf Co Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golf Co Group and Fitbit 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 Fitbit Inc are associated (or correlated) with Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golf Co Group has no effect on the direction of Fitbit i.e., Fitbit and Golf go up and down completely randomly.
Pair Corralation between Fitbit and Golf
If you would invest (100.00) in Fitbit Inc on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Fitbit Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fitbit Inc vs. Golf Co Group
Performance |
| Timeline |
| Fitbit Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Golf Co Group |
Fitbit and Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fitbit and Golf
The main advantage of trading using opposite Fitbit and Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fitbit position performs unexpectedly, Golf 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 Golf will offset losses from the drop in Golf's long position.The idea behind Fitbit Inc and Golf Co 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.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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