Correlation Between Feng Ching and ALFORMER Industrial
Can any of the company-specific risk be diversified away by investing in both Feng Ching and ALFORMER 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 ALFORMER 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 ALFORMER Industrial Co, you can compare the effects of market volatilities on Feng Ching and ALFORMER 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 ALFORMER Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and ALFORMER Industrial.
Diversification Opportunities for Feng Ching and ALFORMER Industrial
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Feng and ALFORMER is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and ALFORMER Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALFORMER 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 ALFORMER Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALFORMER Industrial has no effect on the direction of Feng Ching i.e., Feng Ching and ALFORMER Industrial go up and down completely randomly.
Pair Corralation between Feng Ching and ALFORMER Industrial
Assuming the 90 days trading horizon Feng Ching is expected to generate 4.08 times less return on investment than ALFORMER Industrial. In addition to that, Feng Ching is 1.17 times more volatile than ALFORMER Industrial Co. It trades about 0.01 of its total potential returns per unit of risk. ALFORMER Industrial Co is currently generating about 0.05 per unit of volatility. If you would invest 2,736 in ALFORMER Industrial Co on September 2, 2024 and sell it today you would earn a total of 1,124 from holding ALFORMER Industrial Co or generate 41.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Ching Metal vs. ALFORMER Industrial Co
Performance |
| Timeline |
| Feng Ching Metal |
| ALFORMER Industrial |
Feng Ching and ALFORMER Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and ALFORMER Industrial
The main advantage of trading using opposite Feng Ching and ALFORMER Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, ALFORMER 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 ALFORMER Industrial will offset losses from the drop in ALFORMER Industrial's long position.| Feng Ching vs. Walsin Lihwa Corp | Feng Ching vs. Voltronic Power Technology | Feng Ching vs. Advanced Energy Solution | Feng Ching vs. Simplo Technology Co |
| ALFORMER Industrial vs. Hota Industrial Mfg | ALFORMER Industrial vs. Macauto Industrial Co | ALFORMER Industrial vs. Taiwan Fu Hsing | ALFORMER Industrial vs. Leatec Fine Ceramics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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