Correlation Between Feng Ching and Skardin Industrial
Can any of the company-specific risk be diversified away by investing in both Feng Ching and Skardin Industrial 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 Ching and Skardin Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feng Ching Metal and Skardin Industrial, you can compare the effects of market volatilities on Feng Ching and Skardin Industrial 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 Ching with a short position of Skardin Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and Skardin Industrial.
Diversification Opportunities for Feng Ching and Skardin Industrial
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Feng and Skardin is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and Skardin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skardin Industrial and Feng Ching 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 Ching Metal are associated (or correlated) with Skardin Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skardin Industrial has no effect on the direction of Feng Ching i.e., Feng Ching and Skardin Industrial go up and down completely randomly.
Pair Corralation between Feng Ching and Skardin Industrial
Assuming the 90 days trading horizon Feng Ching Metal is expected to under-perform the Skardin Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Feng Ching Metal is 2.11 times less risky than Skardin Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The Skardin Industrial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,220 in Skardin Industrial on September 5, 2024 and sell it today you would earn a total of 970.00 from holding Skardin Industrial or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Ching Metal vs. Skardin Industrial
Performance |
| Timeline |
| Feng Ching Metal |
| Skardin Industrial |
Feng Ching and Skardin Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and Skardin Industrial
The main advantage of trading using opposite Feng Ching and Skardin Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, Skardin Industrial 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 Skardin Industrial will offset losses from the drop in Skardin Industrial's long position.| Feng Ching vs. Eclat Textile Co | Feng Ching vs. WiseChip Semiconductor | Feng Ching vs. Novatek Microelectronics Corp | Feng Ching vs. Leader Electronics |
| Skardin Industrial vs. Ruentex Engineering Construction | Skardin Industrial vs. Kao Fong Machinery | Skardin Industrial vs. Sporton International | Skardin Industrial vs. Kindom Construction 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 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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