Correlation Between Kee Tai and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Far Eastern 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 Kee Tai and Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Far Eastern New, you can compare the effects of market volatilities on Kee Tai and Far Eastern 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 Kee Tai with a short position of Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Far Eastern.
Diversification Opportunities for Kee Tai and Far Eastern
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kee and Far is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Far Eastern New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern New and Kee Tai 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 Kee Tai Properties are associated (or correlated) with Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern New has no effect on the direction of Kee Tai i.e., Kee Tai and Far Eastern go up and down completely randomly.
Pair Corralation between Kee Tai and Far Eastern
Assuming the 90 days trading horizon Kee Tai is expected to generate 2.78 times less return on investment than Far Eastern. In addition to that, Kee Tai is 1.37 times more volatile than Far Eastern New. It trades about 0.01 of its total potential returns per unit of risk. Far Eastern New is currently generating about 0.03 per unit of volatility. If you would invest 3,110 in Far Eastern New on September 2, 2024 and sell it today you would earn a total of 230.00 from holding Far Eastern New or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Far Eastern New
Performance |
| Timeline |
| Kee Tai Properties |
| Far Eastern New |
Kee Tai and Far Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Far Eastern
The main advantage of trading using opposite Kee Tai and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.| Kee Tai vs. Ruentex Development Co | Kee Tai vs. CTCI Corp | Kee Tai vs. Information Technology Total | Kee Tai vs. Ennoconn Corp |
| Far Eastern vs. Nan Ya Plastics | Far Eastern vs. Taiwan Cement Corp | Far Eastern vs. Formosa Plastics Corp | Far Eastern vs. Asia Cement Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| 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 |