Correlation Between Skardin Industrial and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Skardin Industrial 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 Skardin Industrial and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skardin Industrial and Feng Ching Metal, you can compare the effects of market volatilities on Skardin Industrial 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 Skardin Industrial with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skardin Industrial and Feng Ching.
Diversification Opportunities for Skardin Industrial and Feng Ching
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skardin and Feng is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Skardin Industrial 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 Skardin Industrial 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 Skardin Industrial 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 Skardin Industrial i.e., Skardin Industrial and Feng Ching go up and down completely randomly.
Pair Corralation between Skardin Industrial and Feng Ching
Assuming the 90 days trading horizon Skardin Industrial is expected to generate 2.11 times more return on investment than Feng Ching. However, Skardin Industrial is 2.11 times more volatile than Feng Ching Metal. It trades about 0.19 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.02 per unit of risk. If you would invest 6,220 in Skardin Industrial on September 5, 2024 and sell it today you would earn a total of 970.00 from holding Skardin Industrial or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skardin Industrial vs. Feng Ching Metal
Performance |
| Timeline |
| Skardin Industrial |
| Feng Ching Metal |
Skardin Industrial and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skardin Industrial and Feng Ching
The main advantage of trading using opposite Skardin Industrial and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skardin Industrial 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.| Skardin Industrial vs. Ruentex Engineering Construction | Skardin Industrial vs. Kao Fong Machinery | Skardin Industrial vs. Sporton International | Skardin Industrial vs. Kindom Construction Corp |
| Feng Ching vs. Eclat Textile Co | Feng Ching vs. WiseChip Semiconductor | Feng Ching vs. Novatek Microelectronics Corp | Feng Ching vs. Leader Electronics |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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