Correlation Between Feng Ching and Deltamac Taiwan
Can any of the company-specific risk be diversified away by investing in both Feng Ching and Deltamac Taiwan 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 Deltamac Taiwan 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 Deltamac Taiwan Co, you can compare the effects of market volatilities on Feng Ching and Deltamac Taiwan 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 Deltamac Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and Deltamac Taiwan.
Diversification Opportunities for Feng Ching and Deltamac Taiwan
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Feng and Deltamac is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and Deltamac Taiwan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltamac Taiwan 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 Deltamac Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltamac Taiwan has no effect on the direction of Feng Ching i.e., Feng Ching and Deltamac Taiwan go up and down completely randomly.
Pair Corralation between Feng Ching and Deltamac Taiwan
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 0.53 times more return on investment than Deltamac Taiwan. However, Feng Ching Metal is 1.89 times less risky than Deltamac Taiwan. It trades about 0.11 of its potential returns per unit of risk. Deltamac Taiwan Co is currently generating about -0.07 per unit of risk. If you would invest 1,925 in Feng Ching Metal on December 4, 2024 and sell it today you would earn a total of 305.00 from holding Feng Ching Metal or generate 15.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Feng Ching Metal vs. Deltamac Taiwan Co
Performance |
Timeline |
Feng Ching Metal |
Deltamac Taiwan |
Feng Ching and Deltamac Taiwan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Feng Ching and Deltamac Taiwan
The main advantage of trading using opposite Feng Ching and Deltamac Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, Deltamac Taiwan 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 Deltamac Taiwan will offset losses from the drop in Deltamac Taiwan's long position.Feng Ching vs. Simple Mart Retail | Feng Ching vs. Jinan Acetate Chemical | Feng Ching vs. Excelsior Medical Co | Feng Ching vs. Formosan Union Chemical |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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