Correlation Between FarGlory Hotel and CTCI Corp
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and CTCI 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 CTCI 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 CTCI Corp, you can compare the effects of market volatilities on FarGlory Hotel and CTCI 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 CTCI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and CTCI Corp.
Diversification Opportunities for FarGlory Hotel and CTCI Corp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FarGlory and CTCI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and CTCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTCI 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 CTCI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTCI Corp has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and CTCI Corp go up and down completely randomly.
Pair Corralation between FarGlory Hotel and CTCI Corp
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to generate 1.37 times more return on investment than CTCI Corp. However, FarGlory Hotel is 1.37 times more volatile than CTCI Corp. It trades about -0.15 of its potential returns per unit of risk. CTCI Corp is currently generating about -0.36 per unit of risk. If you would invest 2,810 in FarGlory Hotel Co on September 2, 2024 and sell it today you would lose (330.00) from holding FarGlory Hotel Co or give up 11.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. CTCI Corp
Performance |
| Timeline |
| FarGlory Hotel |
| CTCI Corp |
FarGlory Hotel and CTCI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and CTCI Corp
The main advantage of trading using opposite FarGlory Hotel and CTCI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, CTCI 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 CTCI Corp will offset losses from the drop in CTCI 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 |
| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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