Correlation Between FDC International and Huang Hsiang
Can any of the company-specific risk be diversified away by investing in both FDC International and Huang Hsiang 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 FDC International and Huang Hsiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FDC International Hotels and Huang Hsiang Construction, you can compare the effects of market volatilities on FDC International and Huang Hsiang 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 FDC International with a short position of Huang Hsiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDC International and Huang Hsiang.
Diversification Opportunities for FDC International and Huang Hsiang
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FDC and Huang is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding FDC International Hotels and Huang Hsiang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huang Hsiang Construction and FDC International 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 FDC International Hotels are associated (or correlated) with Huang Hsiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huang Hsiang Construction has no effect on the direction of FDC International i.e., FDC International and Huang Hsiang go up and down completely randomly.
Pair Corralation between FDC International and Huang Hsiang
Assuming the 90 days trading horizon FDC International is expected to generate 36.43 times less return on investment than Huang Hsiang. But when comparing it to its historical volatility, FDC International Hotels is 1.91 times less risky than Huang Hsiang. It trades about 0.03 of its potential returns per unit of risk. Huang Hsiang Construction is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 6,470 in Huang Hsiang Construction on November 29, 2024 and sell it today you would earn a total of 950.00 from holding Huang Hsiang Construction or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FDC International Hotels vs. Huang Hsiang Construction
Performance |
| Timeline |
| FDC International Hotels |
| Huang Hsiang Construction |
FDC International and Huang Hsiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDC International and Huang Hsiang
The main advantage of trading using opposite FDC International and Huang Hsiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDC International position performs unexpectedly, Huang Hsiang 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 Huang Hsiang will offset losses from the drop in Huang Hsiang's long position.| FDC International vs. Formosa International Hotels | FDC International vs. My Humble House | FDC International vs. Wanhwa Enterprise Co | FDC International vs. Gourmet Master Co |
| Huang Hsiang vs. Kindom Construction Corp | Huang Hsiang vs. Highwealth Construction Corp | Huang Hsiang vs. Hung Sheng Construction | Huang Hsiang vs. Huaku Development 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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