Correlation Between FDC International and Feng Tay
Can any of the company-specific risk be diversified away by investing in both FDC International and Feng Tay 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 Feng Tay 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 Feng Tay Enterprises, you can compare the effects of market volatilities on FDC International and Feng Tay 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 Feng Tay. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDC International and Feng Tay.
Diversification Opportunities for FDC International and Feng Tay
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between FDC and Feng is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding FDC International Hotels and Feng Tay Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Tay Enterprises 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 Feng Tay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Tay Enterprises has no effect on the direction of FDC International i.e., FDC International and Feng Tay go up and down completely randomly.
Pair Corralation between FDC International and Feng Tay
Assuming the 90 days trading horizon FDC International Hotels is expected to generate 1.66 times more return on investment than Feng Tay. However, FDC International is 1.66 times more volatile than Feng Tay Enterprises. It trades about 0.02 of its potential returns per unit of risk. Feng Tay Enterprises is currently generating about -0.03 per unit of risk. If you would invest 5,770 in FDC International Hotels on September 12, 2024 and sell it today you would earn a total of 460.00 from holding FDC International Hotels or generate 7.97% 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. Feng Tay Enterprises
Performance |
| Timeline |
| FDC International Hotels |
| Feng Tay Enterprises |
FDC International and Feng Tay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDC International and Feng Tay
The main advantage of trading using opposite FDC International and Feng Tay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDC International position performs unexpectedly, Feng Tay 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 Feng Tay will offset losses from the drop in Feng Tay'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 |
| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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