Correlation Between FDC International and Zimmite Taiwan
Can any of the company-specific risk be diversified away by investing in both FDC International and Zimmite Taiwan 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 Zimmite Taiwan 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 Zimmite Taiwan, you can compare the effects of market volatilities on FDC International and Zimmite Taiwan 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 Zimmite Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDC International and Zimmite Taiwan.
Diversification Opportunities for FDC International and Zimmite Taiwan
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FDC and Zimmite is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding FDC International Hotels and Zimmite Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmite Taiwan 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 Zimmite Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmite Taiwan has no effect on the direction of FDC International i.e., FDC International and Zimmite Taiwan go up and down completely randomly.
Pair Corralation between FDC International and Zimmite Taiwan
Assuming the 90 days trading horizon FDC International is expected to generate 1.49 times less return on investment than Zimmite Taiwan. In addition to that, FDC International is 3.48 times more volatile than Zimmite Taiwan. It trades about 0.02 of its total potential returns per unit of risk. Zimmite Taiwan is currently generating about 0.09 per unit of volatility. If you would invest 5,272 in Zimmite Taiwan on September 14, 2024 and sell it today you would earn a total of 2,088 from holding Zimmite Taiwan or generate 39.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
FDC International Hotels vs. Zimmite Taiwan
Performance |
| Timeline |
| FDC International Hotels |
| Zimmite Taiwan |
FDC International and Zimmite Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDC International and Zimmite Taiwan
The main advantage of trading using opposite FDC International and Zimmite Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDC International position performs unexpectedly, Zimmite Taiwan 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 Zimmite Taiwan will offset losses from the drop in Zimmite Taiwan's long position.| FDC International vs. Feng Tay Enterprises | FDC International vs. Ruentex Development Co | FDC International vs. WiseChip Semiconductor | FDC International vs. Novatek Microelectronics Corp |
| Zimmite Taiwan vs. Chi Hua Fitness | Zimmite Taiwan vs. Dynamic Medical Technologies | Zimmite Taiwan vs. FDC International Hotels | Zimmite Taiwan vs. International Games System |
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 CEOs Directory module to screen CEOs from public companies around the world.
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