Correlation Between Asia Vital and Fulgent Sun
Can any of the company-specific risk be diversified away by investing in both Asia Vital and Fulgent Sun 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 Asia Vital and Fulgent Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Vital Components and Fulgent Sun International, you can compare the effects of market volatilities on Asia Vital and Fulgent Sun 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 Asia Vital with a short position of Fulgent Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Vital and Fulgent Sun.
Diversification Opportunities for Asia Vital and Fulgent Sun
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Fulgent is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Asia Vital Components and Fulgent Sun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Sun International and Asia Vital 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 Asia Vital Components are associated (or correlated) with Fulgent Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Sun International has no effect on the direction of Asia Vital i.e., Asia Vital and Fulgent Sun go up and down completely randomly.
Pair Corralation between Asia Vital and Fulgent Sun
Assuming the 90 days trading horizon Asia Vital is expected to generate 3.73 times less return on investment than Fulgent Sun. In addition to that, Asia Vital is 1.23 times more volatile than Fulgent Sun International. It trades about 0.03 of its total potential returns per unit of risk. Fulgent Sun International is currently generating about 0.12 per unit of volatility. If you would invest 10,700 in Fulgent Sun International on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Fulgent Sun International or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Asia Vital Components vs. Fulgent Sun International
Performance |
| Timeline |
| Asia Vital Components |
| Fulgent Sun International |
Asia Vital and Fulgent Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Vital and Fulgent Sun
The main advantage of trading using opposite Asia Vital and Fulgent Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Vital position performs unexpectedly, Fulgent Sun 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 Fulgent Sun will offset losses from the drop in Fulgent Sun's long position.The idea behind Asia Vital Components and Fulgent Sun International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fulgent Sun vs. Feng Tay Enterprises | Fulgent Sun vs. Pou Chen Corp | Fulgent Sun vs. Taiwan Paiho | Fulgent Sun vs. Merida Industry 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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