Correlation Between Farcent Enterprise and San Neng
Can any of the company-specific risk be diversified away by investing in both Farcent Enterprise and San Neng 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 Farcent Enterprise and San Neng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farcent Enterprise Co and San Neng Group, you can compare the effects of market volatilities on Farcent Enterprise and San Neng 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 Farcent Enterprise with a short position of San Neng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farcent Enterprise and San Neng.
Diversification Opportunities for Farcent Enterprise and San Neng
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Farcent and San is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Farcent Enterprise Co and San Neng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Neng Group and Farcent Enterprise 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 Farcent Enterprise Co are associated (or correlated) with San Neng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Neng Group has no effect on the direction of Farcent Enterprise i.e., Farcent Enterprise and San Neng go up and down completely randomly.
Pair Corralation between Farcent Enterprise and San Neng
Assuming the 90 days trading horizon Farcent Enterprise is expected to generate 7.95 times less return on investment than San Neng. But when comparing it to its historical volatility, Farcent Enterprise Co is 1.51 times less risky than San Neng. It trades about 0.01 of its potential returns per unit of risk. San Neng Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,545 in San Neng Group on November 19, 2024 and sell it today you would earn a total of 810.00 from holding San Neng Group or generate 22.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Farcent Enterprise Co vs. San Neng Group
Performance |
| Timeline |
| Farcent Enterprise |
| San Neng Group |
Farcent Enterprise and San Neng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farcent Enterprise and San Neng
The main advantage of trading using opposite Farcent Enterprise and San Neng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farcent Enterprise position performs unexpectedly, San Neng 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 San Neng will offset losses from the drop in San Neng's long position.| Farcent Enterprise vs. Hey Song Corp | Farcent Enterprise vs. AGV Products Corp | Farcent Enterprise vs. Fwusow Industry Co | Farcent Enterprise vs. Taisun Enterprise 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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