Correlation Between Feng Ching and HIM International
Can any of the company-specific risk be diversified away by investing in both Feng Ching and HIM International 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 HIM International 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 HIM International Music, you can compare the effects of market volatilities on Feng Ching and HIM International 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 HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Ching and HIM International.
Diversification Opportunities for Feng Ching and HIM International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Feng and HIM is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Feng Ching Metal and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music 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 HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of Feng Ching i.e., Feng Ching and HIM International go up and down completely randomly.
Pair Corralation between Feng Ching and HIM International
Assuming the 90 days trading horizon Feng Ching Metal is expected to generate 2.35 times more return on investment than HIM International. However, Feng Ching is 2.35 times more volatile than HIM International Music. It trades about 0.04 of its potential returns per unit of risk. HIM International Music is currently generating about 0.08 per unit of risk. If you would invest 1,615 in Feng Ching Metal on September 3, 2024 and sell it today you would earn a total of 285.00 from holding Feng Ching Metal or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Ching Metal vs. HIM International Music
Performance |
| Timeline |
| Feng Ching Metal |
| HIM International Music |
Feng Ching and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Ching and HIM International
The main advantage of trading using opposite Feng Ching and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Ching position performs unexpectedly, HIM International 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 HIM International will offset losses from the drop in HIM International'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 |
| HIM International vs. Symtek Automation Asia | HIM International vs. WiseChip Semiconductor | HIM International vs. Novatek Microelectronics Corp | HIM International vs. Tanvex BioPharma |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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