Correlation Between Feng Hsin and Yieh Phui
Can any of the company-specific risk be diversified away by investing in both Feng Hsin and Yieh Phui 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 Feng Hsin and Yieh Phui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feng Hsin Steel and Yieh Phui Enterprise, you can compare the effects of market volatilities on Feng Hsin and Yieh Phui 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 Feng Hsin with a short position of Yieh Phui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Hsin and Yieh Phui.
Diversification Opportunities for Feng Hsin and Yieh Phui
Modest diversification
The 3 months correlation between Feng and Yieh is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Feng Hsin Steel and Yieh Phui Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh Phui Enterprise and Feng Hsin 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 Feng Hsin Steel are associated (or correlated) with Yieh Phui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh Phui Enterprise has no effect on the direction of Feng Hsin i.e., Feng Hsin and Yieh Phui go up and down completely randomly.
Pair Corralation between Feng Hsin and Yieh Phui
Assuming the 90 days trading horizon Feng Hsin Steel is expected to generate 0.8 times more return on investment than Yieh Phui. However, Feng Hsin Steel is 1.25 times less risky than Yieh Phui. It trades about 0.03 of its potential returns per unit of risk. Yieh Phui Enterprise is currently generating about 0.01 per unit of risk. If you would invest 6,760 in Feng Hsin Steel on August 25, 2024 and sell it today you would earn a total of 950.00 from holding Feng Hsin Steel or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Feng Hsin Steel vs. Yieh Phui Enterprise
Performance |
| Timeline |
| Feng Hsin Steel |
| Yieh Phui Enterprise |
Feng Hsin and Yieh Phui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Hsin and Yieh Phui
The main advantage of trading using opposite Feng Hsin and Yieh Phui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Hsin position performs unexpectedly, Yieh Phui 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 Yieh Phui will offset losses from the drop in Yieh Phui's long position.| Feng Hsin vs. Cheng Shin Rubber | Feng Hsin vs. Taiwan Cement Corp | Feng Hsin vs. China Steel Chemical | Feng Hsin vs. Yulon Motor Co |
| Yieh Phui vs. Chung Hung Steel | Yieh Phui vs. Tung Ho Steel | Yieh Phui vs. Sheng Yu Steel | Yieh Phui vs. China Steel Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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