Correlation Between Feng Ching and Medigen Biotechnology
Can any of the company-specific risk be diversified away by investing in both Feng Ching and Medigen Biotechnology 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 Feng Ching and Medigen Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feng Ching Metal and Medigen Biotechnology, you can compare the effects of market volatilities on Feng Ching and Medigen Biotechnology 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 Feng Ching with a short position of Medigen Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and Medigen Biotechnology.
Diversification Opportunities for Feng Ching and Medigen Biotechnology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Feng and Medigen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology and Feng Ching 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 Feng Ching Metal are associated (or correlated) with Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of Feng Ching i.e., Feng Ching and Medigen Biotechnology go up and down completely randomly.
Pair Corralation between Feng Ching and Medigen Biotechnology
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 1.03 times more return on investment than Medigen Biotechnology. However, Feng Ching is 1.03 times more volatile than Medigen Biotechnology. It trades about 0.05 of its potential returns per unit of risk. Medigen Biotechnology is currently generating about 0.02 per unit of risk. If you would invest 1,915 in Feng Ching Metal on December 2, 2024 and sell it today you would earn a total of 95.00 from holding Feng Ching Metal or generate 4.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Feng Ching Metal vs. Medigen Biotechnology
Performance |
Timeline |
Feng Ching Metal |
Medigen Biotechnology |
Feng Ching and Medigen Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Feng Ching and Medigen Biotechnology
The main advantage of trading using opposite Feng Ching and Medigen Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, Medigen Biotechnology 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 Medigen Biotechnology will offset losses from the drop in Medigen Biotechnology's long position.Feng Ching vs. Thinking Electronic Industrial | Feng Ching vs. Compal Electronics | Feng Ching vs. CHC Healthcare Group | Feng Ching vs. Lelon Electronics Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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