Correlation Between Hi Lai and Farglory FTZ
Can any of the company-specific risk be diversified away by investing in both Hi Lai and Farglory FTZ 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 Hi Lai and Farglory FTZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and Farglory FTZ Investment, you can compare the effects of market volatilities on Hi Lai and Farglory FTZ 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 Hi Lai with a short position of Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and Farglory FTZ.
Diversification Opportunities for Hi Lai and Farglory FTZ
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 1268 and Farglory is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of Hi Lai i.e., Hi Lai and Farglory FTZ go up and down completely randomly.
Pair Corralation between Hi Lai and Farglory FTZ
Assuming the 90 days trading horizon Hi Lai Foods Co is expected to under-perform the Farglory FTZ. But the stock apears to be less risky and, when comparing its historical volatility, Hi Lai Foods Co is 3.91 times less risky than Farglory FTZ. The stock trades about -0.23 of its potential returns per unit of risk. The Farglory FTZ Investment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,450 in Farglory FTZ Investment on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Farglory FTZ Investment or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. Farglory FTZ Investment
Performance |
| Timeline |
| Hi Lai Foods |
| Farglory FTZ Investment |
Hi Lai and Farglory FTZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and Farglory FTZ
The main advantage of trading using opposite Hi Lai and Farglory FTZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, Farglory FTZ 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 Farglory FTZ will offset losses from the drop in Farglory FTZ's long position.| Hi Lai vs. Farglory FTZ Investment | Hi Lai vs. Shanghai Commercial Savings | Hi Lai vs. STARLUX Airlines Co | Hi Lai vs. Cowealth Medical Holding |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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