Correlation Between Basso Industry and Fortune Electric
Can any of the company-specific risk be diversified away by investing in both Basso Industry and Fortune Electric 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 Basso Industry and Fortune Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and Fortune Electric Co, you can compare the effects of market volatilities on Basso Industry and Fortune Electric 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 Basso Industry with a short position of Fortune Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and Fortune Electric.
Diversification Opportunities for Basso Industry and Fortune Electric
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Basso and Fortune is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry Corp and Fortune Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Electric and Basso Industry 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 Basso Industry Corp are associated (or correlated) with Fortune Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Electric has no effect on the direction of Basso Industry i.e., Basso Industry and Fortune Electric go up and down completely randomly.
Pair Corralation between Basso Industry and Fortune Electric
Assuming the 90 days trading horizon Basso Industry Corp is expected to under-perform the Fortune Electric. But the stock apears to be less risky and, when comparing its historical volatility, Basso Industry Corp is 3.09 times less risky than Fortune Electric. The stock trades about -0.05 of its potential returns per unit of risk. The Fortune Electric Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 54,800 in Fortune Electric Co on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Fortune Electric Co or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Basso Industry Corp vs. Fortune Electric Co
Performance |
| Timeline |
| Basso Industry Corp |
| Fortune Electric |
Basso Industry and Fortune Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and Fortune Electric
The main advantage of trading using opposite Basso Industry and Fortune Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry position performs unexpectedly, Fortune Electric 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 Fortune Electric will offset losses from the drop in Fortune Electric's long position.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
| Fortune Electric vs. Chung Hsin Electric Machinery | Fortune Electric vs. TECO Electric Machinery | Fortune Electric vs. Shihlin Electric Engineering | Fortune Electric vs. Allis Electric 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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