Correlation Between Hunya Foods and Far EasTone
Can any of the company-specific risk be diversified away by investing in both Hunya Foods and Far EasTone 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 Hunya Foods and Far EasTone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunya Foods Co and Far EasTone Telecommunications, you can compare the effects of market volatilities on Hunya Foods and Far EasTone 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 Hunya Foods with a short position of Far EasTone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunya Foods and Far EasTone.
Diversification Opportunities for Hunya Foods and Far EasTone
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hunya and Far is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hunya Foods Co and Far EasTone Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far EasTone Telecomm and Hunya Foods 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 Hunya Foods Co are associated (or correlated) with Far EasTone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far EasTone Telecomm has no effect on the direction of Hunya Foods i.e., Hunya Foods and Far EasTone go up and down completely randomly.
Pair Corralation between Hunya Foods and Far EasTone
Assuming the 90 days trading horizon Hunya Foods Co is expected to under-perform the Far EasTone. But the stock apears to be less risky and, when comparing its historical volatility, Hunya Foods Co is 1.59 times less risky than Far EasTone. The stock trades about -0.04 of its potential returns per unit of risk. The Far EasTone Telecommunications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,950 in Far EasTone Telecommunications on August 30, 2024 and sell it today you would earn a total of 220.00 from holding Far EasTone Telecommunications or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunya Foods Co vs. Far EasTone Telecommunications
Performance |
| Timeline |
| Hunya Foods |
| Far EasTone Telecomm |
Hunya Foods and Far EasTone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunya Foods and Far EasTone
The main advantage of trading using opposite Hunya Foods and Far EasTone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunya Foods position performs unexpectedly, Far EasTone 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 Far EasTone will offset losses from the drop in Far EasTone's long position.The idea behind Hunya Foods Co and Far EasTone Telecommunications 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.| Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. CTBC Financial Holding | Far EasTone vs. Fubon Financial Holding | Far EasTone vs. President Chain Store |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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