Correlation Between FHC Holdings and Chicos FAS

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

Diversification Opportunities for FHC Holdings and Chicos FAS

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between FHC Holdings and Chicos FAS

If you would invest  481.00  in Chicos FAS on December 29, 2023 and sell it today you would earn a total of  278.00  from holding Chicos FAS or generate 57.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

FHC Holdings  vs.  Chicos FAS

 Performance 
       Timeline  
FHC Holdings 

Risk-Adjusted Performance

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Over the last 90 days FHC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FHC Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
Chicos FAS 

Risk-Adjusted Performance

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Over the last 90 days Chicos FAS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Chicos FAS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

FHC Holdings and Chicos FAS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FHC Holdings and Chicos FAS

The main advantage of trading using opposite FHC Holdings and Chicos FAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FHC Holdings position performs unexpectedly, Chicos FAS 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 Chicos FAS will offset losses from the drop in Chicos FAS's long position.
The idea behind FHC Holdings and Chicos FAS 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.
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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