Correlation Between FarGlory Hotel and Ta Ya
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Ta Ya 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 FarGlory Hotel and Ta Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarGlory Hotel Co and Ta Ya Electric, you can compare the effects of market volatilities on FarGlory Hotel and Ta Ya 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 FarGlory Hotel with a short position of Ta Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Ta Ya.
Diversification Opportunities for FarGlory Hotel and Ta Ya
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FarGlory and 1609 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Ta Ya Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ya Electric and FarGlory 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 FarGlory Hotel Co are associated (or correlated) with Ta Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ya Electric has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Ta Ya go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Ta Ya
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the Ta Ya. In addition to that, FarGlory Hotel is 1.14 times more volatile than Ta Ya Electric. It trades about -0.11 of its total potential returns per unit of risk. Ta Ya Electric is currently generating about 0.07 per unit of volatility. If you would invest 4,610 in Ta Ya Electric on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Ta Ya Electric or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Ta Ya Electric
Performance |
| Timeline |
| FarGlory Hotel |
| Ta Ya Electric |
FarGlory Hotel and Ta Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Ta Ya
The main advantage of trading using opposite FarGlory Hotel and Ta Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Ta Ya 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 Ta Ya will offset losses from the drop in Ta Ya's long position.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. First Hotel Co | FarGlory Hotel vs. FDC International Hotels |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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