Correlation Between FarGlory Hotel and Ennoconn Corp
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Ennoconn Corp 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 Ennoconn Corp 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 Ennoconn Corp, you can compare the effects of market volatilities on FarGlory Hotel and Ennoconn Corp 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 Ennoconn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Ennoconn Corp.
Diversification Opportunities for FarGlory Hotel and Ennoconn Corp
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FarGlory and Ennoconn is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Ennoconn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennoconn Corp 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 Ennoconn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennoconn Corp has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Ennoconn Corp go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Ennoconn Corp
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the Ennoconn Corp. But the stock apears to be less risky and, when comparing its historical volatility, FarGlory Hotel Co is 1.16 times less risky than Ennoconn Corp. The stock trades about -0.15 of its potential returns per unit of risk. The Ennoconn Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 29,450 in Ennoconn Corp on September 2, 2024 and sell it today you would earn a total of 650.00 from holding Ennoconn Corp or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Ennoconn Corp
Performance |
| Timeline |
| FarGlory Hotel |
| Ennoconn Corp |
FarGlory Hotel and Ennoconn Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Ennoconn Corp
The main advantage of trading using opposite FarGlory Hotel and Ennoconn Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Ennoconn Corp 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 Ennoconn Corp will offset losses from the drop in Ennoconn Corp'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 |
| Ennoconn Corp vs. Advantech Co | Ennoconn Corp vs. Zhen Ding Technology | Ennoconn Corp vs. General Interface Solution | Ennoconn Corp vs. Hiwin Technologies Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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