Correlation Between Mayer Steel and Feng Hsin
Can any of the company-specific risk be diversified away by investing in both Mayer Steel and Feng Hsin 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 Mayer Steel and Feng Hsin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayer Steel Pipe and Feng Hsin Steel, you can compare the effects of market volatilities on Mayer Steel and Feng Hsin 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 Mayer Steel with a short position of Feng Hsin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayer Steel and Feng Hsin.
Diversification Opportunities for Mayer Steel and Feng Hsin
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mayer and Feng is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mayer Steel Pipe and Feng Hsin Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Hsin Steel and Mayer Steel 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 Mayer Steel Pipe are associated (or correlated) with Feng Hsin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Hsin Steel has no effect on the direction of Mayer Steel i.e., Mayer Steel and Feng Hsin go up and down completely randomly.
Pair Corralation between Mayer Steel and Feng Hsin
Assuming the 90 days trading horizon Mayer Steel Pipe is expected to generate 1.49 times more return on investment than Feng Hsin. However, Mayer Steel is 1.49 times more volatile than Feng Hsin Steel. It trades about 0.03 of its potential returns per unit of risk. Feng Hsin Steel is currently generating about 0.03 per unit of risk. If you would invest 2,355 in Mayer Steel Pipe on September 14, 2024 and sell it today you would earn a total of 475.00 from holding Mayer Steel Pipe or generate 20.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayer Steel Pipe vs. Feng Hsin Steel
Performance |
| Timeline |
| Mayer Steel Pipe |
| Feng Hsin Steel |
Mayer Steel and Feng Hsin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayer Steel and Feng Hsin
The main advantage of trading using opposite Mayer Steel and Feng Hsin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayer Steel position performs unexpectedly, Feng Hsin 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 Feng Hsin will offset losses from the drop in Feng Hsin's long position.| Mayer Steel vs. Froch Enterprise Co | Mayer Steel vs. Hsin Kuang Steel | Mayer Steel vs. Chung Hung Steel | Mayer Steel vs. Tung Ho Steel |
| Feng Hsin vs. Tung Ho Steel | Feng Hsin vs. U Ming Marine Transport | Feng Hsin vs. TSRC Corp | Feng Hsin vs. Cheng Shin Rubber |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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