Correlation Between Feng Tay and Leofoo Development

Can any of the company-specific risk be diversified away by investing in both Feng Tay and Leofoo Development 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 Feng Tay and Leofoo Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Feng Tay Enterprises and Leofoo Development Co, you can compare the effects of market volatilities on Feng Tay and Leofoo Development 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 Feng Tay with a short position of Leofoo Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Tay and Leofoo Development.

Diversification Opportunities for Feng Tay and Leofoo Development

0.41

Correlation Coefficient

Feng Tay  Leofoo Development

Very weak diversification

The 3 months correlation between Feng and Leofoo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Feng Tay Enterprises and Leofoo Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leofoo Development and Feng Tay 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 Feng Tay Enterprises are associated (or correlated) with Leofoo Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leofoo Development has no effect on the direction of Feng Tay i.e., Feng Tay and Leofoo Development go up and down completely randomly.

Pair Corralation between Feng Tay and Leofoo Development

Assuming the 90 days trading horizon Feng Tay Enterprises is expected to generate 2.79 times more return on investment than Leofoo Development. However, Feng Tay is 2.79 times more volatile than Leofoo Development Co. It trades about 0.0 of its potential returns per unit of risk. Leofoo Development Co is currently generating about -0.07 per unit of risk. If you would invest  14,050  in Feng Tay Enterprises on September 15, 2024 and sell it today you would lose (150.00) from holding Feng Tay Enterprises or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Feng Tay Enterprises  vs.  Leofoo Development Co

Feng Tay Enterprises

Risk-Adjusted Performance

0 of 100

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.

Leofoo Development

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Feng Tay and Leofoo Development

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

The idea behind Feng Tay Enterprises and Leofoo Development Co 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.