Correlation Between Hsinli Chemical and Feng Tay

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hsinli Chemical and Feng Tay 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 Hsinli Chemical and Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinli Chemical Industrial and Feng Tay Enterprises, you can compare the effects of market volatilities on Hsinli Chemical and Feng Tay 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 Hsinli Chemical with a short position of Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinli Chemical and Feng Tay.

Diversification Opportunities for Hsinli Chemical and Feng Tay

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hsinli and Feng is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hsinli Chemical Industrial and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises and Hsinli Chemical 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 Hsinli Chemical Industrial are associated (or correlated) with Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of Hsinli Chemical i.e., Hsinli Chemical and Feng Tay go up and down completely randomly.

Pair Corralation between Hsinli Chemical and Feng Tay

Assuming the 90 days trading horizon Hsinli Chemical Industrial is expected to generate 1.55 times more return on investment than Feng Tay. However, Hsinli Chemical is 1.55 times more volatile than Feng Tay Enterprises. It trades about 0.05 of its potential returns per unit of risk. Feng Tay Enterprises is currently generating about 0.0 per unit of risk. If you would invest  4,470  in Hsinli Chemical Industrial on September 15, 2024 and sell it today you would earn a total of  310.00  from holding Hsinli Chemical Industrial or generate 6.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hsinli Chemical Industrial  vs.  Feng Tay Enterprises

 Performance 
       Timeline  
Hsinli Chemical Indu 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Hsinli Chemical Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hsinli Chemical may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Feng Tay Enterprises 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Feng Tay Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Feng Tay is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Hsinli Chemical and Feng Tay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hsinli Chemical and Feng Tay

The main advantage of trading using opposite Hsinli Chemical and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinli Chemical position performs unexpectedly, Feng Tay 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 Tay will offset losses from the drop in Feng Tay's long position.
The idea behind Hsinli Chemical Industrial and Feng Tay Enterprises 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.
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.

Other Complementary Tools

AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital