Correlation Between Arbor Technology and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Arbor Technology and Feng Ching 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 Arbor Technology and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Technology and Feng Ching Metal, you can compare the effects of market volatilities on Arbor Technology and Feng Ching 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 Arbor Technology with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Technology and Feng Ching.
Diversification Opportunities for Arbor Technology and Feng Ching
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Feng is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Technology and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Arbor 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 Arbor Technology are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Arbor Technology i.e., Arbor Technology and Feng Ching go up and down completely randomly.
Pair Corralation between Arbor Technology and Feng Ching
Assuming the 90 days trading horizon Arbor Technology is expected to generate 1.53 times more return on investment than Feng Ching. However, Arbor Technology is 1.53 times more volatile than Feng Ching Metal. It trades about 0.1 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.19 per unit of risk. If you would invest 4,160 in Arbor Technology on October 22, 2024 and sell it today you would earn a total of 725.00 from holding Arbor Technology or generate 17.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Arbor Technology vs. Feng Ching Metal
Performance |
Timeline |
Arbor Technology |
Feng Ching Metal |
Arbor Technology and Feng Ching Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arbor Technology and Feng Ching
The main advantage of trading using opposite Arbor Technology and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Technology position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.Arbor Technology vs. Asmedia Technology | Arbor Technology vs. International CSRC Investment | Arbor Technology vs. Sports Gear Co | Arbor Technology vs. STL Technology Co |
Feng Ching vs. Compal Broadband Networks | Feng Ching vs. Cameo Communications | Feng Ching vs. Dimension Computer Technology | Feng Ching vs. Mitake Information |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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