Correlation Between FSP Technology and Global Lighting
Can any of the company-specific risk be diversified away by investing in both FSP Technology and Global Lighting 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 FSP Technology and Global Lighting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FSP Technology and Global Lighting Technologies, you can compare the effects of market volatilities on FSP Technology and Global Lighting 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 FSP Technology with a short position of Global Lighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of FSP Technology and Global Lighting.
Diversification Opportunities for FSP Technology and Global Lighting
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FSP and Global is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding FSP Technology and Global Lighting Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lighting Tech and FSP Technology 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 FSP Technology are associated (or correlated) with Global Lighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lighting Tech has no effect on the direction of FSP Technology i.e., FSP Technology and Global Lighting go up and down completely randomly.
Pair Corralation between FSP Technology and Global Lighting
Assuming the 90 days trading horizon FSP Technology is expected to generate 1.04 times more return on investment than Global Lighting. However, FSP Technology is 1.04 times more volatile than Global Lighting Technologies. It trades about 0.07 of its potential returns per unit of risk. Global Lighting Technologies is currently generating about 0.02 per unit of risk. If you would invest 3,835 in FSP Technology on September 3, 2024 and sell it today you would earn a total of 2,695 from holding FSP Technology or generate 70.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FSP Technology vs. Global Lighting Technologies
Performance |
| Timeline |
| FSP Technology |
| Global Lighting Tech |
FSP Technology and Global Lighting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FSP Technology and Global Lighting
The main advantage of trading using opposite FSP Technology and Global Lighting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FSP Technology position performs unexpectedly, Global Lighting 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 Global Lighting will offset losses from the drop in Global Lighting's long position.| FSP Technology vs. Universal Microelectronics Co | FSP Technology vs. AVerMedia Technologies | FSP Technology vs. Symtek Automation Asia | FSP Technology vs. WiseChip Semiconductor |
| Global Lighting vs. Arcadyan Technology Corp | Global Lighting vs. Zhen Ding Technology | Global Lighting vs. Taiwan Surface Mounting | Global Lighting vs. Flexium Interconnect |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |