Correlation Between Fitbit and Electro Sensors

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

By analyzing existing cross correlation between Fitbit Inc and Electro Sensors, you can compare the effects of market volatilities on Fitbit and Electro Sensors 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 Electro Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fitbit and Electro Sensors.

Diversification Opportunities for Fitbit and Electro Sensors

0.0

Correlation Coefficient

Fitbit  Electro Sensors

Pay attention - limited upside

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

Pair Corralation between Fitbit and Electro Sensors

If you would invest  414.00  in Electro Sensors on January 26, 2024 and sell it today you would lose (1.00) from holding Electro Sensors or give up 0.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fitbit Inc  vs.  Electro Sensors

Fitbit Inc

Risk-Adjusted Performance

0 of 100

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Electro Sensors

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Electro Sensors are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Electro Sensors is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fitbit and Electro Sensors

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

The idea behind Fitbit Inc and Electro Sensors 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.