Correlation Between Foxconn Technology and Lungyen Life
Can any of the company-specific risk be diversified away by investing in both Foxconn Technology and Lungyen Life 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 Foxconn Technology and Lungyen Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foxconn Technology Co and Lungyen Life Service, you can compare the effects of market volatilities on Foxconn Technology and Lungyen Life 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 Foxconn Technology with a short position of Lungyen Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxconn Technology and Lungyen Life.
Diversification Opportunities for Foxconn Technology and Lungyen Life
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Foxconn and Lungyen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Foxconn Technology Co and Lungyen Life Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lungyen Life Service and Foxconn Technology 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 Foxconn Technology Co are associated (or correlated) with Lungyen Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lungyen Life Service has no effect on the direction of Foxconn Technology i.e., Foxconn Technology and Lungyen Life go up and down completely randomly.
Pair Corralation between Foxconn Technology and Lungyen Life
Assuming the 90 days trading horizon Foxconn Technology Co is expected to generate 1.65 times more return on investment than Lungyen Life. However, Foxconn Technology is 1.65 times more volatile than Lungyen Life Service. It trades about 0.08 of its potential returns per unit of risk. Lungyen Life Service is currently generating about -0.16 per unit of risk. If you would invest 7,630 in Foxconn Technology Co on October 28, 2024 and sell it today you would earn a total of 190.00 from holding Foxconn Technology Co or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foxconn Technology Co vs. Lungyen Life Service
Performance |
| Timeline |
| Foxconn Technology |
| Lungyen Life Service |
Foxconn Technology and Lungyen Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foxconn Technology and Lungyen Life
The main advantage of trading using opposite Foxconn Technology and Lungyen Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foxconn Technology position performs unexpectedly, Lungyen Life 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 Lungyen Life will offset losses from the drop in Lungyen Life's long position.| Foxconn Technology vs. Hon Hai Precision | Foxconn Technology vs. Pegatron Corp | Foxconn Technology vs. MediaTek | Foxconn Technology vs. Hon Hai Precision |
| Lungyen Life vs. Cleanaway Co | Lungyen Life vs. StShine Optical Co | Lungyen Life vs. Formosa International Hotels | Lungyen Life vs. Poya International Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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