Correlation Between Hsin Kuang and Froch Enterprise
Can any of the company-specific risk be diversified away by investing in both Hsin Kuang and Froch 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 Hsin Kuang and Froch Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsin Kuang Steel and Froch Enterprise Co, you can compare the effects of market volatilities on Hsin Kuang and Froch 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 Hsin Kuang with a short position of Froch Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsin Kuang and Froch Enterprise.
Diversification Opportunities for Hsin Kuang and Froch Enterprise
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hsin and Froch is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hsin Kuang Steel and Froch Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Froch Enterprise and Hsin Kuang 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 Hsin Kuang Steel are associated (or correlated) with Froch Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Froch Enterprise has no effect on the direction of Hsin Kuang i.e., Hsin Kuang and Froch Enterprise go up and down completely randomly.
Pair Corralation between Hsin Kuang and Froch Enterprise
Assuming the 90 days trading horizon Hsin Kuang Steel is expected to under-perform the Froch Enterprise. In addition to that, Hsin Kuang is 1.03 times more volatile than Froch Enterprise Co. It trades about -0.05 of its total potential returns per unit of risk. Froch Enterprise Co is currently generating about 0.04 per unit of volatility. If you would invest 1,765 in Froch Enterprise Co on November 28, 2024 and sell it today you would earn a total of 135.00 from holding Froch Enterprise Co or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsin Kuang Steel vs. Froch Enterprise Co
Performance |
| Timeline |
| Hsin Kuang Steel |
| Froch Enterprise |
Hsin Kuang and Froch Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsin Kuang and Froch Enterprise
The main advantage of trading using opposite Hsin Kuang and Froch Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsin Kuang position performs unexpectedly, Froch 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 Froch Enterprise will offset losses from the drop in Froch Enterprise's long position.| Hsin Kuang vs. Chung Hung Steel | Hsin Kuang vs. Tung Ho Steel | Hsin Kuang vs. Ta Chen Stainless | Hsin Kuang vs. Feng Hsin Steel |
| Froch Enterprise vs. Ta Chen Stainless | Froch Enterprise vs. Chung Hung Steel | Froch Enterprise vs. YC Inox Co | Froch Enterprise vs. Sheng Yu Steel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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