Correlation Between China Airlines and Feng Ching
Can any of the company-specific risk be diversified away by investing in both China Airlines and Feng Ching 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 China Airlines and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Airlines and Feng Ching Metal, you can compare the effects of market volatilities on China Airlines and Feng Ching 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 China Airlines with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Airlines and Feng Ching.
Diversification Opportunities for China Airlines and Feng Ching
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Feng is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Airlines and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and China Airlines 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 China Airlines are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of China Airlines i.e., China Airlines and Feng Ching go up and down completely randomly.
Pair Corralation between China Airlines and Feng Ching
Assuming the 90 days trading horizon China Airlines is expected to generate 2.55 times less return on investment than Feng Ching. But when comparing it to its historical volatility, China Airlines is 1.98 times less risky than Feng Ching. It trades about 0.04 of its potential returns per unit of risk. Feng Ching Metal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Feng Ching Metal on August 24, 2024 and sell it today you would earn a total of 450.00 from holding Feng Ching Metal or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Airlines vs. Feng Ching Metal
Performance |
| Timeline |
| China Airlines |
| Feng Ching Metal |
China Airlines and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Airlines and Feng Ching
The main advantage of trading using opposite China Airlines and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Airlines position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.| China Airlines vs. Sunny Friend Environmental | China Airlines vs. Taiwan Secom Co | China Airlines vs. TTET Union Corp | China Airlines vs. ECOVE Environment Corp |
| Feng Ching vs. Walsin Lihwa Corp | Feng Ching vs. Voltronic Power Technology | Feng Ching vs. Advanced Energy Solution | Feng Ching vs. Simplo Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |