Correlation Between Feng Ching and PlayNitride
Can any of the company-specific risk be diversified away by investing in both Feng Ching and PlayNitride 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 PlayNitride 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 PlayNitride, you can compare the effects of market volatilities on Feng Ching and PlayNitride 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 PlayNitride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and PlayNitride.
Diversification Opportunities for Feng Ching and PlayNitride
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Feng and PlayNitride is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and PlayNitride in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayNitride 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 PlayNitride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayNitride has no effect on the direction of Feng Ching i.e., Feng Ching and PlayNitride go up and down completely randomly.
Pair Corralation between Feng Ching and PlayNitride
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 0.33 times more return on investment than PlayNitride. However, Feng Ching Metal is 3.02 times less risky than PlayNitride. It trades about -0.01 of its potential returns per unit of risk. PlayNitride is currently generating about -0.04 per unit of risk. If you would invest 1,915 in Feng Ching Metal on September 1, 2024 and sell it today you would lose (15.00) from holding Feng Ching Metal or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Ching Metal vs. PlayNitride
Performance |
| Timeline |
| Feng Ching Metal |
| PlayNitride |
Feng Ching and PlayNitride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and PlayNitride
The main advantage of trading using opposite Feng Ching and PlayNitride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, PlayNitride 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 PlayNitride will offset losses from the drop in PlayNitride's long position.| Feng Ching vs. Intai Technology | Feng Ching vs. Microtips Technology | Feng Ching vs. Maxigen Biotech | Feng Ching vs. V Tac Technology Co |
| PlayNitride vs. Softstar Entertainment | PlayNitride vs. V Tac Technology Co | PlayNitride vs. Great China Metal | PlayNitride vs. Feng Ching Metal |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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