Correlation Between FarGlory Hotel and Sun Sea
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Sun Sea 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 Sun Sea 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 Sun Sea Construction, you can compare the effects of market volatilities on FarGlory Hotel and Sun Sea 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 Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Sun Sea.
Diversification Opportunities for FarGlory Hotel and Sun Sea
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FarGlory and Sun is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction 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 Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Sun Sea go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Sun Sea
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to generate 0.88 times more return on investment than Sun Sea. However, FarGlory Hotel Co is 1.14 times less risky than Sun Sea. It trades about 0.13 of its potential returns per unit of risk. Sun Sea Construction is currently generating about -0.29 per unit of risk. If you would invest 2,475 in FarGlory Hotel Co on November 28, 2024 and sell it today you would earn a total of 40.00 from holding FarGlory Hotel Co or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Sun Sea Construction
Performance |
| Timeline |
| FarGlory Hotel |
| Sun Sea Construction |
FarGlory Hotel and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Sun Sea
The main advantage of trading using opposite FarGlory Hotel and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea's long position.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel Co |
| Sun Sea vs. Prime Oil Chemical | Sun Sea vs. Sporton International | Sun Sea vs. Oriental Union Chemical | Sun Sea vs. Asmedia Technology |
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
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |