Correlation Between Feng Ching and TMP Steel
Can any of the company-specific risk be diversified away by investing in both Feng Ching and TMP Steel 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 TMP Steel 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 TMP Steel, you can compare the effects of market volatilities on Feng Ching and TMP Steel 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 TMP Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and TMP Steel.
Diversification Opportunities for Feng Ching and TMP Steel
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Feng and TMP is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and TMP Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMP Steel 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 TMP Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMP Steel has no effect on the direction of Feng Ching i.e., Feng Ching and TMP Steel go up and down completely randomly.
Pair Corralation between Feng Ching and TMP Steel
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 1.99 times more return on investment than TMP Steel. However, Feng Ching is 1.99 times more volatile than TMP Steel. It trades about 0.04 of its potential returns per unit of risk. TMP Steel is currently generating about 0.01 per unit of risk. If you would invest 1,650 in Feng Ching Metal on September 14, 2024 and sell it today you would earn a total of 370.00 from holding Feng Ching Metal or generate 22.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Ching Metal vs. TMP Steel
Performance |
| Timeline |
| Feng Ching Metal |
| TMP Steel |
Feng Ching and TMP Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and TMP Steel
The main advantage of trading using opposite Feng Ching and TMP Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, TMP Steel 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 TMP Steel will offset losses from the drop in TMP Steel's long position.| Feng Ching vs. Voltronic Power Technology | Feng Ching vs. Advanced Energy Solution | Feng Ching vs. Simplo Technology Co | Feng Ching vs. Amtran Technology Co |
| TMP Steel vs. Tong Tai Machine Tool | TMP Steel vs. Oriental Union Chemical | TMP Steel vs. Ruentex Development Co | TMP Steel vs. Symtek Automation Asia |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |