Correlation Between ESUN Financial and Faraday Technology
Can any of the company-specific risk be diversified away by investing in both ESUN Financial and Faraday Technology 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 ESUN Financial and Faraday Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESUN Financial Holding and Faraday Technology Corp, you can compare the effects of market volatilities on ESUN Financial and Faraday Technology 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 ESUN Financial with a short position of Faraday Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and Faraday Technology.
Diversification Opportunities for ESUN Financial and Faraday Technology
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESUN and Faraday is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and Faraday Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Technology Corp and ESUN Financial 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 ESUN Financial Holding are associated (or correlated) with Faraday Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Technology Corp has no effect on the direction of ESUN Financial i.e., ESUN Financial and Faraday Technology go up and down completely randomly.
Pair Corralation between ESUN Financial and Faraday Technology
Assuming the 90 days trading horizon ESUN Financial Holding is expected to generate 0.41 times more return on investment than Faraday Technology. However, ESUN Financial Holding is 2.42 times less risky than Faraday Technology. It trades about 0.02 of its potential returns per unit of risk. Faraday Technology Corp is currently generating about -0.03 per unit of risk. If you would invest 2,860 in ESUN Financial Holding on November 28, 2024 and sell it today you would earn a total of 95.00 from holding ESUN Financial Holding or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.79% |
| Values | Daily Returns |
ESUN Financial Holding vs. Faraday Technology Corp
Performance |
| Timeline |
| ESUN Financial Holding |
| Faraday Technology Corp |
ESUN Financial and Faraday Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and Faraday Technology
The main advantage of trading using opposite ESUN Financial and Faraday Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial position performs unexpectedly, Faraday Technology 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 Faraday Technology will offset losses from the drop in Faraday Technology's long position.| ESUN Financial vs. Mega Financial Holding | ESUN Financial vs. CTBC Financial Holding | ESUN Financial vs. First Financial Holding | ESUN Financial vs. Fubon Financial Holding |
| Faraday Technology vs. Global Unichip Corp | Faraday Technology vs. Novatek Microelectronics Corp | Faraday Technology vs. Realtek Semiconductor Corp | Faraday Technology vs. Unimicron Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |