Correlation Between IFamilySC and FNSTech
Can any of the company-specific risk be diversified away by investing in both IFamilySC and FNSTech 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 IFamilySC and FNSTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iFamilySC Co and FNSTech Co, you can compare the effects of market volatilities on IFamilySC and FNSTech 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 IFamilySC with a short position of FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of IFamilySC and FNSTech.
Diversification Opportunities for IFamilySC and FNSTech
Very poor diversification
The 3 months correlation between IFamilySC and FNSTech is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iFamilySC Co and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech and IFamilySC 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 iFamilySC Co are associated (or correlated) with FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of IFamilySC i.e., IFamilySC and FNSTech go up and down completely randomly.
Pair Corralation between IFamilySC and FNSTech
Assuming the 90 days trading horizon iFamilySC Co is expected to under-perform the FNSTech. In addition to that, IFamilySC is 1.23 times more volatile than FNSTech Co. It trades about -0.1 of its total potential returns per unit of risk. FNSTech Co is currently generating about -0.1 per unit of volatility. If you would invest 1,077,000 in FNSTech Co on September 2, 2024 and sell it today you would lose (209,000) from holding FNSTech Co or give up 19.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iFamilySC Co vs. FNSTech Co
Performance |
| Timeline |
| iFamilySC |
| FNSTech |
IFamilySC and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IFamilySC and FNSTech
The main advantage of trading using opposite IFamilySC and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IFamilySC position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech's long position.| IFamilySC vs. Daedong Metals Co | IFamilySC vs. Dongwon Metal Co | IFamilySC vs. Shinsegae Information Communication | IFamilySC vs. Polaris Office Corp |
| FNSTech vs. Samsung Electronics Co | FNSTech vs. Samsung Electronics Co | FNSTech vs. LG Energy Solution | FNSTech vs. SK Hynix |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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