Correlation Between Federal Corp and Yem Chio
Can any of the company-specific risk be diversified away by investing in both Federal Corp and Yem Chio 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 Federal Corp and Yem Chio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Corp and Yem Chio Co, you can compare the effects of market volatilities on Federal Corp and Yem Chio 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 Federal Corp with a short position of Yem Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Corp and Yem Chio.
Diversification Opportunities for Federal Corp and Yem Chio
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Yem is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Federal Corp and Yem Chio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yem Chio and Federal Corp 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 Federal Corp are associated (or correlated) with Yem Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yem Chio has no effect on the direction of Federal Corp i.e., Federal Corp and Yem Chio go up and down completely randomly.
Pair Corralation between Federal Corp and Yem Chio
Assuming the 90 days trading horizon Federal Corp is expected to generate 0.92 times more return on investment than Yem Chio. However, Federal Corp is 1.08 times less risky than Yem Chio. It trades about -0.02 of its potential returns per unit of risk. Yem Chio Co is currently generating about -0.08 per unit of risk. If you would invest 2,185 in Federal Corp on September 1, 2024 and sell it today you would lose (10.00) from holding Federal Corp or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Corp vs. Yem Chio Co
Performance |
| Timeline |
| Federal Corp |
| Yem Chio |
Federal Corp and Yem Chio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Corp and Yem Chio
The main advantage of trading using opposite Federal Corp and Yem Chio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Corp position performs unexpectedly, Yem Chio 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 Yem Chio will offset losses from the drop in Yem Chio's long position.| Federal Corp vs. Chaintech Technology Corp | Federal Corp vs. AVerMedia Technologies | Federal Corp vs. Avision | Federal Corp vs. Clevo Co |
| Yem Chio vs. BES Engineering Co | Yem Chio vs. Continental Holdings Corp | Yem Chio vs. Kee Tai Properties | Yem Chio vs. Hung Sheng Construction |
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.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |