Correlation Between Feng Ching and Macroblock
Can any of the company-specific risk be diversified away by investing in both Feng Ching and Macroblock 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 Macroblock 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 Macroblock, you can compare the effects of market volatilities on Feng Ching and Macroblock 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 Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and Macroblock.
Diversification Opportunities for Feng Ching and Macroblock
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Feng and Macroblock is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Feng Ching i.e., Feng Ching and Macroblock go up and down completely randomly.
Pair Corralation between Feng Ching and Macroblock
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 1.59 times more return on investment than Macroblock. However, Feng Ching is 1.59 times more volatile than Macroblock. It trades about -0.02 of its potential returns per unit of risk. Macroblock is currently generating about -0.09 per unit of risk. If you would invest 2,150 in Feng Ching Metal on September 5, 2024 and sell it today you would lose (245.00) from holding Feng Ching Metal or give up 11.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Feng Ching Metal vs. Macroblock
Performance |
| Timeline |
| Feng Ching Metal |
| Macroblock |
Feng Ching and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and Macroblock
The main advantage of trading using opposite Feng Ching and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock'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 |
| Macroblock vs. Skardin Industrial | Macroblock vs. Feng Ching Metal | Macroblock vs. Great China Metal | Macroblock vs. De Licacy Industrial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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