Correlation Between Tainan Enterprises and Feng Tay
Can any of the company-specific risk be diversified away by investing in both Tainan Enterprises and Feng Tay 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 Tainan Enterprises and Feng Tay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainan Enterprises Co and Feng Tay Enterprises, you can compare the effects of market volatilities on Tainan Enterprises and Feng Tay 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 Tainan Enterprises with a short position of Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainan Enterprises and Feng Tay.
Diversification Opportunities for Tainan Enterprises and Feng Tay
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tainan and Feng is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tainan Enterprises Co and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises and Tainan Enterprises 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 Tainan Enterprises Co are associated (or correlated) with Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of Tainan Enterprises i.e., Tainan Enterprises and Feng Tay go up and down completely randomly.
Pair Corralation between Tainan Enterprises and Feng Tay
Assuming the 90 days trading horizon Tainan Enterprises Co is expected to under-perform the Feng Tay. But the stock apears to be less risky and, when comparing its historical volatility, Tainan Enterprises Co is 1.94 times less risky than Feng Tay. The stock trades about -0.11 of its potential returns per unit of risk. The Feng Tay Enterprises is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 13,300 in Feng Tay Enterprises on September 18, 2024 and sell it today you would earn a total of 750.00 from holding Feng Tay Enterprises or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainan Enterprises Co vs. Feng Tay Enterprises
Performance |
| Timeline |
| Tainan Enterprises |
| Feng Tay Enterprises |
Tainan Enterprises and Feng Tay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainan Enterprises and Feng Tay
The main advantage of trading using opposite Tainan Enterprises and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainan Enterprises position performs unexpectedly, Feng Tay 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 Feng Tay will offset losses from the drop in Feng Tay's long position.| Tainan Enterprises vs. Feng Tay Enterprises | Tainan Enterprises vs. Ruentex Development Co | Tainan Enterprises vs. WiseChip Semiconductor | Tainan Enterprises vs. Novatek Microelectronics Corp |
| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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