Correlation Between Fortune Electric and Airtac International
Can any of the company-specific risk be diversified away by investing in both Fortune Electric and Airtac International 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 Fortune Electric and Airtac International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Electric Co and Airtac International Group, you can compare the effects of market volatilities on Fortune Electric and Airtac International 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 Fortune Electric with a short position of Airtac International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Electric and Airtac International.
Diversification Opportunities for Fortune Electric and Airtac International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fortune and Airtac is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Electric Co and Airtac International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtac International and Fortune Electric 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 Fortune Electric Co are associated (or correlated) with Airtac International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtac International has no effect on the direction of Fortune Electric i.e., Fortune Electric and Airtac International go up and down completely randomly.
Pair Corralation between Fortune Electric and Airtac International
Assuming the 90 days trading horizon Fortune Electric Co is expected to under-perform the Airtac International. In addition to that, Fortune Electric is 1.18 times more volatile than Airtac International Group. It trades about -0.03 of its total potential returns per unit of risk. Airtac International Group is currently generating about 0.06 per unit of volatility. If you would invest 77,400 in Airtac International Group on September 15, 2024 and sell it today you would earn a total of 6,600 from holding Airtac International Group or generate 8.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fortune Electric Co vs. Airtac International Group
Performance |
Timeline |
Fortune Electric |
Airtac International |
Fortune Electric and Airtac International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fortune Electric and Airtac International
The main advantage of trading using opposite Fortune Electric and Airtac International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Electric position performs unexpectedly, Airtac International 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 Airtac International will offset losses from the drop in Airtac International's long position.Fortune Electric vs. Chung Hsin Electric Machinery | Fortune Electric vs. TECO Electric Machinery | Fortune Electric vs. Shihlin Electric Engineering | Fortune Electric vs. Allis Electric Co |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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