Correlation Between Fulin Plastic and Eclat Textile
Can any of the company-specific risk be diversified away by investing in both Fulin Plastic and Eclat Textile 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 Fulin Plastic and Eclat Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulin Plastic Industry and Eclat Textile Co, you can compare the effects of market volatilities on Fulin Plastic and Eclat Textile 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 Fulin Plastic with a short position of Eclat Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulin Plastic and Eclat Textile.
Diversification Opportunities for Fulin Plastic and Eclat Textile
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fulin and Eclat is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fulin Plastic Industry and Eclat Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclat Textile and Fulin Plastic 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 Fulin Plastic Industry are associated (or correlated) with Eclat Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclat Textile has no effect on the direction of Fulin Plastic i.e., Fulin Plastic and Eclat Textile go up and down completely randomly.
Pair Corralation between Fulin Plastic and Eclat Textile
Assuming the 90 days trading horizon Fulin Plastic is expected to generate 15.2 times less return on investment than Eclat Textile. But when comparing it to its historical volatility, Fulin Plastic Industry is 2.34 times less risky than Eclat Textile. It trades about 0.0 of its potential returns per unit of risk. Eclat Textile Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 52,100 in Eclat Textile Co on September 12, 2024 and sell it today you would earn a total of 1,000.00 from holding Eclat Textile Co or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulin Plastic Industry vs. Eclat Textile Co
Performance |
| Timeline |
| Fulin Plastic Industry |
| Eclat Textile |
Fulin Plastic and Eclat Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulin Plastic and Eclat Textile
The main advantage of trading using opposite Fulin Plastic and Eclat Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulin Plastic position performs unexpectedly, Eclat Textile 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 Eclat Textile will offset losses from the drop in Eclat Textile's long position.| Fulin Plastic vs. Eclat Textile Co | Fulin Plastic vs. Ruentex Industries | Fulin Plastic vs. Shinkong Synthetic Fiber | Fulin Plastic vs. Taiwan Paiho |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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