Correlation Between Feng Hsin and Andes Technology
Can any of the company-specific risk be diversified away by investing in both Feng Hsin and Andes Technology 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 Andes Technology 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 Andes Technology Corp, you can compare the effects of market volatilities on Feng Hsin and Andes Technology 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 Andes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Hsin and Andes Technology.
Diversification Opportunities for Feng Hsin and Andes Technology
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Feng and Andes is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Feng Hsin Steel and Andes Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andes Technology Corp 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 Andes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andes Technology Corp has no effect on the direction of Feng Hsin i.e., Feng Hsin and Andes Technology go up and down completely randomly.
Pair Corralation between Feng Hsin and Andes Technology
Assuming the 90 days trading horizon Feng Hsin Steel is expected to under-perform the Andes Technology. But the stock apears to be less risky and, when comparing its historical volatility, Feng Hsin Steel is 2.09 times less risky than Andes Technology. The stock trades about -0.33 of its potential returns per unit of risk. The Andes Technology Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 41,300 in Andes Technology Corp on September 12, 2024 and sell it today you would lose (1,950) from holding Andes Technology Corp or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Hsin Steel vs. Andes Technology Corp
Performance |
| Timeline |
| Feng Hsin Steel |
| Andes Technology Corp |
Feng Hsin and Andes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Hsin and Andes Technology
The main advantage of trading using opposite Feng Hsin and Andes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Hsin position performs unexpectedly, Andes Technology 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 Andes Technology will offset losses from the drop in Andes Technology's long position.| Feng Hsin vs. Tainan Spinning Co | Feng Hsin vs. Lealea Enterprise Co | Feng Hsin vs. China Petrochemical Development | Feng Hsin vs. Ruentex Development Co |
| Andes Technology vs. An Shin Food Services | Andes Technology vs. Phytohealth Corp | Andes Technology vs. GameSparcs Co | Andes Technology vs. Tehmag Foods |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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