Correlation Between Feng Tay and Taiwan Sakura

Can any of the company-specific risk be diversified away by investing in both Feng Tay and Taiwan Sakura 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 Taiwan Sakura 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 Taiwan Sakura Corp, you can compare the effects of market volatilities on Feng Tay and Taiwan Sakura 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 Taiwan Sakura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Tay and Taiwan Sakura.

Diversification Opportunities for Feng Tay and Taiwan Sakura

-0.18

Correlation Coefficient

Feng Tay  Taiwan Sakura

Good diversification

The 3 months correlation between Feng and Taiwan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Feng Tay Enterprises and Taiwan Sakura Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sakura Corp 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 Taiwan Sakura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sakura Corp has no effect on the direction of Feng Tay i.e., Feng Tay and Taiwan Sakura go up and down completely randomly.

Pair Corralation between Feng Tay and Taiwan Sakura

Assuming the 90 days trading horizon Feng Tay Enterprises is expected to under-perform the Taiwan Sakura. In addition to that, Feng Tay is 2.58 times more volatile than Taiwan Sakura Corp. It trades about -0.08 of its total potential returns per unit of risk. Taiwan Sakura Corp is currently generating about 0.23 per unit of volatility. If you would invest  8,410  in Taiwan Sakura Corp on December 29, 2024 and sell it today you would earn a total of  760.00  from holding Taiwan Sakura Corp or generate 9.04% return on investment over 90 days.

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

Feng Tay Enterprises  vs.  Taiwan Sakura Corp

Feng Tay Enterprises

Risk-Adjusted Performance

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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Taiwan Sakura Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Sakura Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taiwan Sakura may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Feng Tay and Taiwan Sakura

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

The idea behind Feng Tay Enterprises and Taiwan Sakura Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.