Correlation Between FDC International and C Media
Can any of the company-specific risk be diversified away by investing in both FDC International and C Media 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 C Media 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 C Media Electronics, you can compare the effects of market volatilities on FDC International and C Media 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 C Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDC International and C Media.
Diversification Opportunities for FDC International and C Media
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FDC and 6237 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FDC International Hotels and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics 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 C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of FDC International i.e., FDC International and C Media go up and down completely randomly.
Pair Corralation between FDC International and C Media
Assuming the 90 days trading horizon FDC International Hotels is expected to generate 0.54 times more return on investment than C Media. However, FDC International Hotels is 1.85 times less risky than C Media. It trades about -0.11 of its potential returns per unit of risk. C Media Electronics is currently generating about -0.36 per unit of risk. If you would invest 6,010 in FDC International Hotels on August 24, 2024 and sell it today you would lose (170.00) from holding FDC International Hotels or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FDC International Hotels vs. C Media Electronics
Performance |
| Timeline |
| FDC International Hotels |
| C Media Electronics |
FDC International and C Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDC International and C Media
The main advantage of trading using opposite FDC International and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDC International position performs unexpectedly, C Media 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 C Media will offset losses from the drop in C Media's long position.| FDC International vs. Taiwan Semiconductor Manufacturing | FDC International vs. Hon Hai Precision | FDC International vs. MediaTek | FDC International vs. Chunghwa Telecom Co |
| C Media vs. Global Unichip Corp | C Media vs. Asmedia Technology | C Media vs. Unimicron Technology Corp | C Media vs. Novatek Microelectronics Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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