Correlation Between FarGlory Hotel and FDC International
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and FDC International 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 FDC International 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 FDC International Hotels, you can compare the effects of market volatilities on FarGlory Hotel and FDC International 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 FDC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and FDC International.
Diversification Opportunities for FarGlory Hotel and FDC International
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FarGlory and FDC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and FDC International Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDC International Hotels 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 FDC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDC International Hotels has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and FDC International go up and down completely randomly.
Pair Corralation between FarGlory Hotel and FDC International
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the FDC International. In addition to that, FarGlory Hotel is 1.49 times more volatile than FDC International Hotels. It trades about -0.16 of its total potential returns per unit of risk. FDC International Hotels is currently generating about -0.11 per unit of volatility. If you would invest 6,010 in FDC International Hotels on August 24, 2024 and sell it today you would lose (170.00) from holding FDC International Hotels or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. FDC International Hotels
Performance |
| Timeline |
| FarGlory Hotel |
| FDC International Hotels |
FarGlory Hotel and FDC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and FDC International
The main advantage of trading using opposite FarGlory Hotel and FDC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, FDC International 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 FDC International will offset losses from the drop in FDC International's long position.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. First Hotel Co | FarGlory Hotel vs. FDC International Hotels | FarGlory Hotel vs. Ruentex Development Co |
| FDC International vs. Taiwan Semiconductor Manufacturing | FDC International vs. Hon Hai Precision | FDC International vs. MediaTek | FDC International vs. Chunghwa Telecom 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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