Correlation Between Fortune Information and Great Computer
Can any of the company-specific risk be diversified away by investing in both Fortune Information and Great Computer 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 Fortune Information and Great Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Information Systems and Great Computer, you can compare the effects of market volatilities on Fortune Information and Great Computer 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 Fortune Information with a short position of Great Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Information and Great Computer.
Diversification Opportunities for Fortune Information and Great Computer
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortune and Great is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Information Systems and Great Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Computer and Fortune Information 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 Fortune Information Systems are associated (or correlated) with Great Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Computer has no effect on the direction of Fortune Information i.e., Fortune Information and Great Computer go up and down completely randomly.
Pair Corralation between Fortune Information and Great Computer
Assuming the 90 days trading horizon Fortune Information is expected to generate 12.28 times less return on investment than Great Computer. But when comparing it to its historical volatility, Fortune Information Systems is 1.65 times less risky than Great Computer. It trades about 0.01 of its potential returns per unit of risk. Great Computer is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,575 in Great Computer on October 25, 2024 and sell it today you would earn a total of 220.00 from holding Great Computer or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortune Information Systems vs. Great Computer
Performance |
| Timeline |
| Fortune Information |
| Great Computer |
Fortune Information and Great Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Information and Great Computer
The main advantage of trading using opposite Fortune Information and Great Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Information position performs unexpectedly, Great Computer 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 Great Computer will offset losses from the drop in Great Computer's long position.| Fortune Information vs. Stark Technology | Fortune Information vs. Ares International Corp | Fortune Information vs. Leadtek Research | Fortune Information vs. Zinwell |
| Great Computer vs. Fortune Information Systems | Great Computer vs. Evergreen International Storage | Great Computer vs. Wistron Information Technology | Great Computer vs. Datavan International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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