Correlation Between Foxconn Technology and Da Li
Can any of the company-specific risk be diversified away by investing in both Foxconn Technology and Da Li 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 Foxconn Technology and Da Li into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foxconn Technology Co and Da Li Development Co, you can compare the effects of market volatilities on Foxconn Technology and Da Li 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 Foxconn Technology with a short position of Da Li. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxconn Technology and Da Li.
Diversification Opportunities for Foxconn Technology and Da Li
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Foxconn and 6177 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Foxconn Technology Co and Da Li Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Li Development and Foxconn Technology 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 Foxconn Technology Co are associated (or correlated) with Da Li. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Li Development has no effect on the direction of Foxconn Technology i.e., Foxconn Technology and Da Li go up and down completely randomly.
Pair Corralation between Foxconn Technology and Da Li
Assuming the 90 days trading horizon Foxconn Technology Co is expected to under-perform the Da Li. In addition to that, Foxconn Technology is 1.41 times more volatile than Da Li Development Co. It trades about -0.16 of its total potential returns per unit of risk. Da Li Development Co is currently generating about -0.14 per unit of volatility. If you would invest 4,580 in Da Li Development Co on September 25, 2024 and sell it today you would lose (245.00) from holding Da Li Development Co or give up 5.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Foxconn Technology Co vs. Da Li Development Co
Performance |
Timeline |
Foxconn Technology |
Da Li Development |
Foxconn Technology and Da Li Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Foxconn Technology and Da Li
The main advantage of trading using opposite Foxconn Technology and Da Li positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foxconn Technology position performs unexpectedly, Da Li 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 Da Li will offset losses from the drop in Da Li's long position.Foxconn Technology vs. Century Wind Power | Foxconn Technology vs. Green World Fintech | Foxconn Technology vs. Ingentec | Foxconn Technology vs. Chaheng Precision 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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