Correlation Between Fittech and Golden Friends
Can any of the company-specific risk be diversified away by investing in both Fittech and Golden Friends 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 Golden Friends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fittech Co and Golden Friends, you can compare the effects of market volatilities on Fittech and Golden Friends 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 Golden Friends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fittech and Golden Friends.
Diversification Opportunities for Fittech and Golden Friends
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fittech and Golden is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fittech Co and Golden Friends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Friends 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 Golden Friends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Friends has no effect on the direction of Fittech i.e., Fittech and Golden Friends go up and down completely randomly.
Pair Corralation between Fittech and Golden Friends
Assuming the 90 days trading horizon Fittech Co is expected to under-perform the Golden Friends. In addition to that, Fittech is 4.03 times more volatile than Golden Friends. It trades about -0.64 of its total potential returns per unit of risk. Golden Friends is currently generating about -0.04 per unit of volatility. If you would invest 10,250 in Golden Friends on October 8, 2024 and sell it today you would lose (50.00) from holding Golden Friends or give up 0.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fittech Co vs. Golden Friends
Performance |
Timeline |
Fittech |
Golden Friends |
Fittech and Golden Friends Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fittech and Golden Friends
The main advantage of trading using opposite Fittech and Golden Friends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fittech position performs unexpectedly, Golden Friends 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 Golden Friends will offset losses from the drop in Golden Friends' long position.Fittech vs. Sitronix Technology Corp | Fittech vs. Taiwan Surface Mounting | Fittech vs. Nan Ya Printed | Fittech vs. Visual Photonics Epitaxy |
Golden Friends vs. Charoen Pokphand Enterprise | Golden Friends vs. Taiwan Sakura Corp | Golden Friends vs. Great Wall Enterprise | Golden Friends vs. TTET Union Corp |
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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