Correlation Between FDC International and Tait Marketing
Can any of the company-specific risk be diversified away by investing in both FDC International and Tait Marketing 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 Tait Marketing 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 Tait Marketing Distribution, you can compare the effects of market volatilities on FDC International and Tait Marketing 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 Tait Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDC International and Tait Marketing.
Diversification Opportunities for FDC International and Tait Marketing
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between FDC and Tait is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FDC International Hotels and Tait Marketing Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tait Marketing Distr 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 Tait Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tait Marketing Distr has no effect on the direction of FDC International i.e., FDC International and Tait Marketing go up and down completely randomly.
Pair Corralation between FDC International and Tait Marketing
Assuming the 90 days trading horizon FDC International Hotels is expected to generate 2.79 times more return on investment than Tait Marketing. However, FDC International is 2.79 times more volatile than Tait Marketing Distribution. It trades about 0.09 of its potential returns per unit of risk. Tait Marketing Distribution is currently generating about 0.06 per unit of risk. If you would invest 6,030 in FDC International Hotels on September 2, 2024 and sell it today you would earn a total of 140.00 from holding FDC International Hotels or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FDC International Hotels vs. Tait Marketing Distribution
Performance |
| Timeline |
| FDC International Hotels |
| Tait Marketing Distr |
FDC International and Tait Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDC International and Tait Marketing
The main advantage of trading using opposite FDC International and Tait Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDC International position performs unexpectedly, Tait Marketing 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 Tait Marketing will offset losses from the drop in Tait Marketing's long position.| FDC International vs. Chaintech Technology Corp | FDC International vs. Avision | FDC International vs. Clevo Co | FDC International vs. Elitegroup Computer Systems |
| Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Mid Cap | Tait Marketing vs. Fubon MSCI Taiwan |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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