Correlation Between First Copper and Cheng Fwa

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

By analyzing existing cross correlation between First Copper Technology and Cheng Fwa Industrial, you can compare the effects of market volatilities on First Copper and Cheng Fwa 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 First Copper with a short position of Cheng Fwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Copper and Cheng Fwa.

Diversification Opportunities for First Copper and Cheng Fwa

-0.22

Correlation Coefficient

First Copper  Cheng Fwa

Very good diversification

The 3 months correlation between First and Cheng is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding First Copper Technology and Cheng Fwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheng Fwa Industrial and First Copper 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 First Copper Technology are associated (or correlated) with Cheng Fwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheng Fwa Industrial has no effect on the direction of First Copper i.e., First Copper and Cheng Fwa go up and down completely randomly.

Pair Corralation between First Copper and Cheng Fwa

Assuming the 90 days trading horizon First Copper Technology is expected to generate 1.25 times more return on investment than Cheng Fwa. However, First Copper is 1.25 times more volatile than Cheng Fwa Industrial. It trades about 0.13 of its potential returns per unit of risk. Cheng Fwa Industrial is currently generating about -0.09 per unit of risk. If you would invest  3,740  in First Copper Technology on December 29, 2024 and sell it today you would earn a total of  780.00  from holding First Copper Technology or generate 20.86% return on investment over 90 days.

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

First Copper Technology  vs.  Cheng Fwa Industrial

First Copper Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Copper Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, First Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Cheng Fwa Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cheng Fwa Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with First Copper and Cheng Fwa

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

The idea behind First Copper Technology and Cheng Fwa 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.