Correlation Between Taiyen Biotech and Fu Burg

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

By analyzing existing cross correlation between Taiyen Biotech Co and Fu Burg Industrial, you can compare the effects of market volatilities on Taiyen Biotech and Fu Burg 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 Taiyen Biotech with a short position of Fu Burg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiyen Biotech and Fu Burg.

Diversification Opportunities for Taiyen Biotech and Fu Burg

-0.1

Correlation Coefficient

Taiyen Biotech  Fu Burg

Good diversification

The 3 months correlation between Taiyen and 8929 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Taiyen Biotech Co and Fu Burg Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fu Burg Industrial and Taiyen Biotech 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 Taiyen Biotech Co are associated (or correlated) with Fu Burg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fu Burg Industrial has no effect on the direction of Taiyen Biotech i.e., Taiyen Biotech and Fu Burg go up and down completely randomly.

Pair Corralation between Taiyen Biotech and Fu Burg

Assuming the 90 days trading horizon Taiyen Biotech Co is expected to generate 0.2 times more return on investment than Fu Burg. However, Taiyen Biotech Co is 5.04 times less risky than Fu Burg. It trades about -0.02 of its potential returns per unit of risk. Fu Burg Industrial is currently generating about -0.07 per unit of risk. If you would invest  3,255  in Taiyen Biotech Co on December 29, 2024 and sell it today you would lose (20.00) from holding Taiyen Biotech Co or give up 0.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Taiyen Biotech Co  vs.  Fu Burg Industrial

Taiyen Biotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taiyen Biotech Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Taiyen Biotech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fu Burg Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fu Burg Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Taiyen Biotech and Fu Burg

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

The idea behind Taiyen Biotech Co and Fu Burg Industrial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.