Correlation Between Hsinli Chemical and Feng Tay
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hsinli Chemical Industrial vs. Feng Tay Enterprises
Performance |
Timeline |
Hsinli Chemical Indu |
Feng Tay Enterprises |
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.Hsinli Chemical vs. Feng Tay Enterprises | Hsinli Chemical vs. Pou Chen Corp | Hsinli Chemical vs. Fulgent Sun International | Hsinli Chemical vs. Shui Mu International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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