Correlation Between Fair Oaks and Foresight Environmental

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

By analyzing existing cross correlation between Fair Oaks Income and Foresight Environmental Infrastructure, you can compare the effects of market volatilities on Fair Oaks and Foresight Environmental 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 Fair Oaks with a short position of Foresight Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and Foresight Environmental.

Diversification Opportunities for Fair Oaks and Foresight Environmental

0.76

Correlation Coefficient

Fair Oaks  Foresight Environmental

Poor diversification

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

Pair Corralation between Fair Oaks and Foresight Environmental

Assuming the 90 days trading horizon Fair Oaks is expected to generate 1.66 times less return on investment than Foresight Environmental. In addition to that, Fair Oaks is 1.11 times more volatile than Foresight Environmental Infrastructure. It trades about 0.1 of its total potential returns per unit of risk. Foresight Environmental Infrastructure is currently generating about 0.19 per unit of volatility. If you would invest  7,157  in Foresight Environmental Infrastructure on April 16, 2025 and sell it today you would earn a total of  993.00  from holding Foresight Environmental Infrastructure or generate 13.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Fair Oaks Income  vs.  Foresight Environmental Infras

Fair Oaks Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Oaks Income are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fair Oaks may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Foresight Environmental

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Foresight Environmental Infrastructure are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Foresight Environmental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fair Oaks and Foresight Environmental

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

The idea behind Fair Oaks Income and Foresight Environmental Infrastructure 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 Directory module to find actively traded commodities issued by global exchanges.