Correlation Between IBF Financial and Farglory FTZ
Can any of the company-specific risk be diversified away by investing in both IBF Financial and Farglory FTZ 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 IBF Financial and Farglory FTZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBF Financial Holdings and Farglory FTZ Investment, you can compare the effects of market volatilities on IBF Financial and Farglory FTZ 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 IBF Financial with a short position of Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBF Financial and Farglory FTZ.
Diversification Opportunities for IBF Financial and Farglory FTZ
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IBF and Farglory is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding IBF Financial Holdings and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment and IBF 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 IBF Financial Holdings are associated (or correlated) with Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of IBF Financial i.e., IBF Financial and Farglory FTZ go up and down completely randomly.
Pair Corralation between IBF Financial and Farglory FTZ
Assuming the 90 days trading horizon IBF Financial Holdings is expected to under-perform the Farglory FTZ. But the stock apears to be less risky and, when comparing its historical volatility, IBF Financial Holdings is 1.02 times less risky than Farglory FTZ. The stock trades about -0.08 of its potential returns per unit of risk. The Farglory FTZ Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,400 in Farglory FTZ Investment on August 30, 2024 and sell it today you would earn a total of 65.00 from holding Farglory FTZ Investment or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IBF Financial Holdings vs. Farglory FTZ Investment
Performance |
| Timeline |
| IBF Financial Holdings |
| Farglory FTZ Investment |
IBF Financial and Farglory FTZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBF Financial and Farglory FTZ
The main advantage of trading using opposite IBF Financial and Farglory FTZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBF Financial position performs unexpectedly, Farglory FTZ 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 Farglory FTZ will offset losses from the drop in Farglory FTZ's long position.| IBF Financial vs. Tex Ray Industrial Co | IBF Financial vs. Chain Chon Industrial | IBF Financial vs. Jentech Precision Industrial | IBF Financial vs. Excelsior Medical Co |
| Farglory FTZ vs. Evergreen International Storage | Farglory FTZ vs. China Container Terminal | Farglory FTZ vs. Sincere Navigation Corp | Farglory FTZ vs. CSBC Corp 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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