Correlation Between First Hotel and Voltronic Power
Can any of the company-specific risk be diversified away by investing in both First Hotel and Voltronic Power 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 First Hotel and Voltronic Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hotel Co and Voltronic Power Technology, you can compare the effects of market volatilities on First Hotel and Voltronic Power 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 First Hotel with a short position of Voltronic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hotel and Voltronic Power.
Diversification Opportunities for First Hotel and Voltronic Power
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Voltronic is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding First Hotel Co and Voltronic Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltronic Power Tech and First Hotel 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 First Hotel Co are associated (or correlated) with Voltronic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltronic Power Tech has no effect on the direction of First Hotel i.e., First Hotel and Voltronic Power go up and down completely randomly.
Pair Corralation between First Hotel and Voltronic Power
Assuming the 90 days trading horizon First Hotel is expected to generate 3.69 times less return on investment than Voltronic Power. But when comparing it to its historical volatility, First Hotel Co is 2.01 times less risky than Voltronic Power. It trades about 0.01 of its potential returns per unit of risk. Voltronic Power Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 165,500 in Voltronic Power Technology on September 3, 2024 and sell it today you would earn a total of 19,500 from holding Voltronic Power Technology or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hotel Co vs. Voltronic Power Technology
Performance |
| Timeline |
| First Hotel |
| Voltronic Power Tech |
First Hotel and Voltronic Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hotel and Voltronic Power
The main advantage of trading using opposite First Hotel and Voltronic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hotel position performs unexpectedly, Voltronic Power 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 Voltronic Power will offset losses from the drop in Voltronic Power's long position.| First Hotel vs. Tainan Spinning Co | First Hotel vs. Chia Her Industrial | First Hotel vs. WiseChip Semiconductor | First Hotel vs. Novatek Microelectronics Corp |
| Voltronic Power vs. Eclat Textile Co | Voltronic Power vs. WiseChip Semiconductor | Voltronic Power vs. Novatek Microelectronics Corp | Voltronic Power vs. Leader Electronics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |