Correlation Between Fittech and Ta Liang
Can any of the company-specific risk be diversified away by investing in both Fittech and Ta Liang 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 Fittech and Ta Liang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fittech Co and Ta Liang Technology, you can compare the effects of market volatilities on Fittech and Ta Liang 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 Fittech with a short position of Ta Liang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fittech and Ta Liang.
Diversification Opportunities for Fittech and Ta Liang
Poor diversification
The 3 months correlation between Fittech and 3167 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fittech Co and Ta Liang Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Liang Technology and Fittech 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 Fittech Co are associated (or correlated) with Ta Liang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Liang Technology has no effect on the direction of Fittech i.e., Fittech and Ta Liang go up and down completely randomly.
Pair Corralation between Fittech and Ta Liang
Assuming the 90 days trading horizon Fittech Co is expected to generate 1.0 times more return on investment than Ta Liang. However, Fittech Co is 1.0 times less risky than Ta Liang. It trades about 0.15 of its potential returns per unit of risk. Ta Liang Technology is currently generating about 0.09 per unit of risk. If you would invest 5,300 in Fittech Co on September 24, 2024 and sell it today you would earn a total of 8,250 from holding Fittech Co or generate 155.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fittech Co vs. Ta Liang Technology
Performance |
Timeline |
Fittech |
Ta Liang Technology |
Fittech and Ta Liang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fittech and Ta Liang
The main advantage of trading using opposite Fittech and Ta Liang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fittech position performs unexpectedly, Ta Liang 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 Ta Liang will offset losses from the drop in Ta Liang's long position.Fittech vs. Turvo International Co | Fittech vs. Sanyang Motor Co | Fittech vs. Global PMX Co | Fittech vs. Yulon Nissan Motor |
Ta Liang vs. Turvo International Co | Ta Liang vs. Sanyang Motor Co | Ta Liang vs. Global PMX Co | Ta Liang vs. Yulon Nissan Motor |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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