Correlation Between HOYA Resort and FDC International
Can any of the company-specific risk be diversified away by investing in both HOYA Resort 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 HOYA Resort and FDC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOYA Resort Hotel and FDC International Hotels, you can compare the effects of market volatilities on HOYA Resort 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 HOYA Resort with a short position of FDC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOYA Resort and FDC International.
Diversification Opportunities for HOYA Resort and FDC International
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HOYA and FDC is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Resort Hotel 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 HOYA Resort 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 HOYA Resort Hotel 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 HOYA Resort i.e., HOYA Resort and FDC International go up and down completely randomly.
Pair Corralation between HOYA Resort and FDC International
Assuming the 90 days trading horizon HOYA Resort Hotel is expected to generate 1.16 times more return on investment than FDC International. However, HOYA Resort is 1.16 times more volatile than FDC International Hotels. It trades about 0.0 of its potential returns per unit of risk. FDC International Hotels is currently generating about -0.02 per unit of risk. If you would invest 2,395 in HOYA Resort Hotel on August 24, 2024 and sell it today you would lose (520.00) from holding HOYA Resort Hotel or give up 21.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOYA Resort Hotel vs. FDC International Hotels
Performance |
| Timeline |
| HOYA Resort Hotel |
| FDC International Hotels |
HOYA Resort and FDC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOYA Resort and FDC International
The main advantage of trading using opposite HOYA Resort and FDC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOYA Resort 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.| HOYA Resort vs. Formosa International Hotels | HOYA Resort vs. Ambassador Hotel | HOYA Resort vs. FDC International Hotels | HOYA Resort vs. First Hotel 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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