Correlation Between Fletcher Building and Nasdaq

By analyzing existing cross correlation between Fletcher Building Limited and Nasdaq Inc you can compare the effects of market volatilities on Fletcher Building and Nasdaq 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 Fletcher Building with a short position of Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fletcher Building and Nasdaq.

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Can any of the company-specific risk be diversified away by investing in both Fletcher Building and Nasdaq at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Fletcher Building and Nasdaq into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for Fletcher Building and Nasdaq

-0.45
Correlation
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Very good diversification

The 3 months correlation between Fletcher and Nasdaq is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fletcher Building Limited Ordi and Nasdaq Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc and Fletcher Building 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 Fletcher Building Limited are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Fletcher Building i.e. Fletcher Building and Nasdaq go up and down completely randomly.

Pair Corralation between Fletcher Building and Nasdaq

Assuming 30 trading days horizon, Fletcher Building Limited is expected to under-perform the Nasdaq. But the stock apears to be less risky and, when comparing its historical volatility, Fletcher Building Limited is 1.15 times less risky than Nasdaq. The stock trades about -0.06 of its potential returns per unit of risk. The Nasdaq Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10,607  in Nasdaq Inc on May 7, 2020 and sell it today you would earn a total of  1,383  from holding Nasdaq Inc or generate 13.04% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy84.38%
ValuesDaily Returns

Fletcher Building Limited Ordi  vs.  Nasdaq Inc

 Performance (%) 
      Timeline 
Fletcher Building 
00

Fletcher Building Risk-Adjusted Performance

Over the last 30 days Fletcher Building Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2020. The current disturbance may also be a sign of long term up-swing for the company investors.
Nasdaq Inc 
44

Nasdaq Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 30 days. Inspite very unsteady forward-looking indicators, Nasdaq displayed solid returns over the last few months and may actually be approaching a breakup point.

Fletcher Building and Nasdaq Volatility Contrast

 Predicted Return Density 
      Returns 

Fletcher Building Limited

Pair trading matchups for Fletcher Building

Check out your portfolio center. Please also try Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.


 
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