Correlation Between FOS Capital and Hastings Technology

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

By analyzing existing cross correlation between FOS Capital and Hastings Technology Metals, you can compare the effects of market volatilities on FOS Capital and Hastings Technology 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 FOS Capital with a short position of Hastings Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOS Capital and Hastings Technology.

Diversification Opportunities for FOS Capital and Hastings Technology

-0.06

Correlation Coefficient

FOS Capital  Hastings Technology

Good diversification

The 3 months correlation between FOS and Hastings is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding FOS Capital and Hastings Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hastings Technology and FOS Capital 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 FOS Capital are associated (or correlated) with Hastings Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hastings Technology has no effect on the direction of FOS Capital i.e., FOS Capital and Hastings Technology go up and down completely randomly.

Pair Corralation between FOS Capital and Hastings Technology

Assuming the 90 days trading horizon FOS Capital is expected to generate 1.01 times more return on investment than Hastings Technology. However, FOS Capital is 1.01 times more volatile than Hastings Technology Metals. It trades about 0.0 of its potential returns per unit of risk. Hastings Technology Metals is currently generating about -0.05 per unit of risk. If you would invest  32.00  in FOS Capital on April 23, 2025 and sell it today you would lose (1.00) from holding FOS Capital or give up 3.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FOS Capital  vs.  Hastings Technology Metals

FOS Capital

Risk-Adjusted Performance

Very Weak

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

Hastings Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hastings Technology Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with FOS Capital and Hastings Technology

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

The idea behind FOS Capital and Hastings Technology Metals 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.