Correlation Between Integrated Service and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Integrated Service and Feng Ching 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 Integrated Service and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Service Technology and Feng Ching Metal, you can compare the effects of market volatilities on Integrated Service and Feng Ching 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 Integrated Service with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Service and Feng Ching.
Diversification Opportunities for Integrated Service and Feng Ching
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integrated and Feng is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Service Technology and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Integrated Service 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 Integrated Service Technology are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Integrated Service i.e., Integrated Service and Feng Ching go up and down completely randomly.
Pair Corralation between Integrated Service and Feng Ching
Assuming the 90 days trading horizon Integrated Service Technology is expected to generate 1.01 times more return on investment than Feng Ching. However, Integrated Service is 1.01 times more volatile than Feng Ching Metal. It trades about 0.04 of its potential returns per unit of risk. Feng Ching Metal is currently generating about 0.0 per unit of risk. If you would invest 9,213 in Integrated Service Technology on November 28, 2024 and sell it today you would earn a total of 4,187 from holding Integrated Service Technology or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Integrated Service Technology vs. Feng Ching Metal
Performance |
| Timeline |
| Integrated Service |
| Feng Ching Metal |
Integrated Service and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Service and Feng Ching
The main advantage of trading using opposite Integrated Service and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Service position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.| Integrated Service vs. Tehmag Foods | Integrated Service vs. Far EasTone Telecommunications | Integrated Service vs. Wei Chuan Foods | Integrated Service vs. Feng Ching Metal |
| Feng Ching vs. Da Cin Construction Co | Feng Ching vs. China Construction Bank | Feng Ching vs. Lihtai Construction Enterprise | Feng Ching vs. Advanced Wireless Semiconductor |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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