Correlation Between FNSTech and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both FNSTech and Cuckoo Electronics 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 FNSTech and Cuckoo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNSTech Co and Cuckoo Electronics Co, you can compare the effects of market volatilities on FNSTech and Cuckoo Electronics 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 FNSTech with a short position of Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNSTech and Cuckoo Electronics.
Diversification Opportunities for FNSTech and Cuckoo Electronics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FNSTech and Cuckoo is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding FNSTech Co and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics and FNSTech 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 FNSTech Co are associated (or correlated) with Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of FNSTech i.e., FNSTech and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between FNSTech and Cuckoo Electronics
Assuming the 90 days trading horizon FNSTech Co is expected to generate 4.05 times more return on investment than Cuckoo Electronics. However, FNSTech is 4.05 times more volatile than Cuckoo Electronics Co. It trades about 0.4 of its potential returns per unit of risk. Cuckoo Electronics Co is currently generating about -0.11 per unit of risk. If you would invest 795,000 in FNSTech Co on October 28, 2024 and sell it today you would earn a total of 293,000 from holding FNSTech Co or generate 36.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNSTech Co vs. Cuckoo Electronics Co
Performance |
| Timeline |
| FNSTech |
| Cuckoo Electronics |
FNSTech and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNSTech and Cuckoo Electronics
The main advantage of trading using opposite FNSTech and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNSTech position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| FNSTech vs. Samsung Electronics Co | FNSTech vs. Samsung Electronics Co | FNSTech vs. LG Energy Solution | FNSTech vs. SK Hynix |
| Cuckoo Electronics vs. Samsung Electronics Co | Cuckoo Electronics vs. Samsung Electronics Co | Cuckoo Electronics vs. KB Financial Group | Cuckoo Electronics vs. Shinhan Financial Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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