Correlation Between Yung Chi and Farcent Enterprise
Can any of the company-specific risk be diversified away by investing in both Yung Chi and Farcent Enterprise 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 Yung Chi and Farcent Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yung Chi Paint and Farcent Enterprise Co, you can compare the effects of market volatilities on Yung Chi and Farcent Enterprise 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 Yung Chi with a short position of Farcent Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yung Chi and Farcent Enterprise.
Diversification Opportunities for Yung Chi and Farcent Enterprise
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yung and Farcent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Yung Chi Paint and Farcent Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farcent Enterprise and Yung Chi 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 Yung Chi Paint are associated (or correlated) with Farcent Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farcent Enterprise has no effect on the direction of Yung Chi i.e., Yung Chi and Farcent Enterprise go up and down completely randomly.
Pair Corralation between Yung Chi and Farcent Enterprise
Assuming the 90 days trading horizon Yung Chi Paint is expected to under-perform the Farcent Enterprise. In addition to that, Yung Chi is 1.23 times more volatile than Farcent Enterprise Co. It trades about -0.04 of its total potential returns per unit of risk. Farcent Enterprise Co is currently generating about 0.15 per unit of volatility. If you would invest 5,290 in Farcent Enterprise Co on September 14, 2024 and sell it today you would earn a total of 90.00 from holding Farcent Enterprise Co or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yung Chi Paint vs. Farcent Enterprise Co
Performance |
| Timeline |
| Yung Chi Paint |
| Farcent Enterprise |
Yung Chi and Farcent Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yung Chi and Farcent Enterprise
The main advantage of trading using opposite Yung Chi and Farcent Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yung Chi position performs unexpectedly, Farcent Enterprise 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 Farcent Enterprise will offset losses from the drop in Farcent Enterprise's long position.| Yung Chi vs. China Steel Chemical | Yung Chi vs. Taiwan Secom Co | Yung Chi vs. Standard Foods Corp | Yung Chi vs. Eternal Materials Co |
| Farcent Enterprise vs. Charoen Pokphand Enterprise | Farcent Enterprise vs. Yung Chi Paint | Farcent Enterprise vs. TTET Union Corp | Farcent Enterprise vs. Taiwan Secom 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |