Correlation Between Axiomtek and Formosa Petrochemical
Can any of the company-specific risk be diversified away by investing in both Axiomtek and Formosa Petrochemical 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 Axiomtek and Formosa Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axiomtek Co and Formosa Petrochemical Corp, you can compare the effects of market volatilities on Axiomtek and Formosa Petrochemical 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 Axiomtek with a short position of Formosa Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axiomtek and Formosa Petrochemical.
Diversification Opportunities for Axiomtek and Formosa Petrochemical
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axiomtek and Formosa is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Axiomtek Co and Formosa Petrochemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosa Petrochemical and Axiomtek 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 Axiomtek Co are associated (or correlated) with Formosa Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosa Petrochemical has no effect on the direction of Axiomtek i.e., Axiomtek and Formosa Petrochemical go up and down completely randomly.
Pair Corralation between Axiomtek and Formosa Petrochemical
Assuming the 90 days trading horizon Axiomtek Co is expected to generate 1.44 times more return on investment than Formosa Petrochemical. However, Axiomtek is 1.44 times more volatile than Formosa Petrochemical Corp. It trades about 0.22 of its potential returns per unit of risk. Formosa Petrochemical Corp is currently generating about 0.07 per unit of risk. If you would invest 10,800 in Axiomtek Co on October 24, 2024 and sell it today you would earn a total of 1,850 from holding Axiomtek Co or generate 17.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axiomtek Co vs. Formosa Petrochemical Corp
Performance |
| Timeline |
| Axiomtek |
| Formosa Petrochemical |
Axiomtek and Formosa Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axiomtek and Formosa Petrochemical
The main advantage of trading using opposite Axiomtek and Formosa Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axiomtek position performs unexpectedly, Formosa Petrochemical 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 Formosa Petrochemical will offset losses from the drop in Formosa Petrochemical's long position.| Axiomtek vs. O Bank Co | Axiomtek vs. Silicon Power Computer | Axiomtek vs. China Times Publishing | Axiomtek vs. Double Bond Chemical |
| Formosa Petrochemical vs. Kinsus Interconnect Technology | Formosa Petrochemical vs. Lian Hwa Foods | Formosa Petrochemical vs. ADLINK Technology | Formosa Petrochemical vs. Posiflex Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |