Correlation Between FarGlory Hotel and Medtecs International
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Medtecs 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 Medtecs 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 Medtecs International, you can compare the effects of market volatilities on FarGlory Hotel and Medtecs 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 Medtecs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Medtecs International.
Diversification Opportunities for FarGlory Hotel and Medtecs International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FarGlory and Medtecs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Medtecs International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtecs International 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 Medtecs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medtecs International has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Medtecs International go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Medtecs International
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the Medtecs International. In addition to that, FarGlory Hotel is 1.12 times more volatile than Medtecs International. It trades about -0.15 of its total potential returns per unit of risk. Medtecs International is currently generating about -0.16 per unit of volatility. If you would invest 706.00 in Medtecs International on September 2, 2024 and sell it today you would lose (78.00) from holding Medtecs International or give up 11.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Medtecs International
Performance |
| Timeline |
| FarGlory Hotel |
| Medtecs International |
FarGlory Hotel and Medtecs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Medtecs International
The main advantage of trading using opposite FarGlory Hotel and Medtecs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Medtecs 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 Medtecs International will offset losses from the drop in Medtecs International'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 |
| Medtecs International vs. Universal Vision Biotechnology | Medtecs International vs. Excelsior Medical Co | Medtecs International vs. Hi Clearance | Medtecs International vs. Brighten Optix |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |