Correlation Between Formycon and Bisichi Mining

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

By analyzing existing cross correlation between Formycon AG and Bisichi Mining PLC, you can compare the effects of market volatilities on Formycon and Bisichi Mining 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 Formycon with a short position of Bisichi Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formycon and Bisichi Mining.

Diversification Opportunities for Formycon and Bisichi Mining

0.76

Correlation Coefficient

Formycon  Bisichi Mining

Poor diversification

The 3 months correlation between Formycon and Bisichi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Formycon AG and Bisichi Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisichi Mining PLC and Formycon 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 Formycon AG are associated (or correlated) with Bisichi Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisichi Mining PLC has no effect on the direction of Formycon i.e., Formycon and Bisichi Mining go up and down completely randomly.

Pair Corralation between Formycon and Bisichi Mining

Assuming the 90 days trading horizon Formycon AG is expected to generate 1.82 times more return on investment than Bisichi Mining. However, Formycon is 1.82 times more volatile than Bisichi Mining PLC. It trades about 0.17 of its potential returns per unit of risk. Bisichi Mining PLC is currently generating about 0.24 per unit of risk. If you would invest  2,280  in Formycon AG on April 17, 2025 and sell it today you would earn a total of  705.00  from holding Formycon AG or generate 30.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Formycon AG  vs.  Bisichi Mining PLC

Formycon AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Formycon AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Formycon unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bisichi Mining PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bisichi Mining PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bisichi Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Formycon and Bisichi Mining

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

The idea behind Formycon AG and Bisichi Mining PLC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.