Correlation Between Electro Sensors and Fitbit

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Can any of the company-specific risk be diversified away by investing in both Electro Sensors and Fitbit 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 Electro Sensors and Fitbit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electro Sensors and Fitbit Inc, you can compare the effects of market volatilities on Electro Sensors and Fitbit 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 Electro Sensors with a short position of Fitbit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electro Sensors and Fitbit.

Diversification Opportunities for Electro Sensors and Fitbit

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Electro Sensors and Fitbit

If you would invest (100.00) in Fitbit Inc on December 20, 2023 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Electro-Sensors  vs.  Fitbit Inc

 Performance 
       Timeline  
Electro-Sensors 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Electro Sensors are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Electro Sensors may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Fitbit Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Fitbit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Fitbit is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Electro Sensors and Fitbit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Electro Sensors and Fitbit

The main advantage of trading using opposite Electro Sensors and Fitbit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electro Sensors position performs unexpectedly, Fitbit 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 Fitbit will offset losses from the drop in Fitbit's long position.
The idea behind Electro Sensors and Fitbit Inc 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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