Correlation Between Global Standard and Finetechnix CoLtd
Can any of the company-specific risk be diversified away by investing in both Global Standard and Finetechnix CoLtd 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 Global Standard and Finetechnix CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Standard Technology and Finetechnix CoLtd, you can compare the effects of market volatilities on Global Standard and Finetechnix CoLtd 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 Global Standard with a short position of Finetechnix CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Finetechnix CoLtd.
Diversification Opportunities for Global Standard and Finetechnix CoLtd
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Finetechnix is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and Finetechnix CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finetechnix CoLtd and Global Standard 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 Global Standard Technology are associated (or correlated) with Finetechnix CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finetechnix CoLtd has no effect on the direction of Global Standard i.e., Global Standard and Finetechnix CoLtd go up and down completely randomly.
Pair Corralation between Global Standard and Finetechnix CoLtd
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 1.47 times more return on investment than Finetechnix CoLtd. However, Global Standard is 1.47 times more volatile than Finetechnix CoLtd. It trades about 0.04 of its potential returns per unit of risk. Finetechnix CoLtd is currently generating about -0.06 per unit of risk. If you would invest 1,010,784 in Global Standard Technology on September 3, 2024 and sell it today you would earn a total of 389,216 from holding Global Standard Technology or generate 38.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Standard Technology vs. Finetechnix CoLtd
Performance |
| Timeline |
| Global Standard Tech |
| Finetechnix CoLtd |
Global Standard and Finetechnix CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Finetechnix CoLtd
The main advantage of trading using opposite Global Standard and Finetechnix CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard position performs unexpectedly, Finetechnix CoLtd 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 Finetechnix CoLtd will offset losses from the drop in Finetechnix CoLtd's long position.| Global Standard vs. Dongsin Engineering Construction | Global Standard vs. Doosan Fuel Cell | Global Standard vs. Daishin Balance 1 | Global Standard vs. Total Soft Bank |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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