Correlation Between Feng Ching and Ibase Gaming
Can any of the company-specific risk be diversified away by investing in both Feng Ching and Ibase Gaming 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 Ibase Gaming 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 Ibase Gaming, you can compare the effects of market volatilities on Feng Ching and Ibase Gaming 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 Ibase Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and Ibase Gaming.
Diversification Opportunities for Feng Ching and Ibase Gaming
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Feng and Ibase is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and Ibase Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibase Gaming 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 Ibase Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibase Gaming has no effect on the direction of Feng Ching i.e., Feng Ching and Ibase Gaming go up and down completely randomly.
Pair Corralation between Feng Ching and Ibase Gaming
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 1.16 times more return on investment than Ibase Gaming. However, Feng Ching is 1.16 times more volatile than Ibase Gaming. It trades about 0.0 of its potential returns per unit of risk. Ibase Gaming is currently generating about -0.03 per unit of risk. If you would invest 2,580 in Feng Ching Metal on November 28, 2024 and sell it today you would lose (575.00) from holding Feng Ching Metal or give up 22.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Ching Metal vs. Ibase Gaming
Performance |
| Timeline |
| Feng Ching Metal |
| Ibase Gaming |
Feng Ching and Ibase Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and Ibase Gaming
The main advantage of trading using opposite Feng Ching and Ibase Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, Ibase Gaming 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 Ibase Gaming will offset losses from the drop in Ibase Gaming's long position.| Feng Ching vs. Da Cin Construction Co | Feng Ching vs. China Construction Bank | Feng Ching vs. Lihtai Construction Enterprise | Feng Ching vs. Advanced Wireless Semiconductor |
| Ibase Gaming vs. Emerging Display Technologies | Ibase Gaming vs. Lanner Electronics | Ibase Gaming vs. King Chou Marine | Ibase Gaming vs. Information Technology Total |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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