Correlation Between Lotes and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Lotes 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 Lotes and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotes Co and Feng Ching Metal, you can compare the effects of market volatilities on Lotes 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 Lotes with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotes and Feng Ching.
Diversification Opportunities for Lotes and Feng Ching
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotes and Feng is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lotes Co 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 Lotes 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 Lotes Co 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 Lotes i.e., Lotes and Feng Ching go up and down completely randomly.
Pair Corralation between Lotes and Feng Ching
Assuming the 90 days trading horizon Lotes is expected to generate 1.42 times less return on investment than Feng Ching. In addition to that, Lotes is 1.77 times more volatile than Feng Ching Metal. It trades about 0.04 of its total potential returns per unit of risk. Feng Ching Metal is currently generating about 0.11 per unit of volatility. If you would invest 1,755 in Feng Ching Metal on November 18, 2024 and sell it today you would earn a total of 55.00 from holding Feng Ching Metal or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotes Co vs. Feng Ching Metal
Performance |
| Timeline |
| Lotes |
| Feng Ching Metal |
Lotes and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotes and Feng Ching
The main advantage of trading using opposite Lotes and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotes 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.| Lotes vs. Unimicron Technology Corp | Lotes vs. Alchip Technologies | Lotes vs. Nan Ya Printed | Lotes vs. Global Unichip Corp |
| Feng Ching vs. Elitegroup Computer Systems | Feng Ching vs. Professional Computer Technology | Feng Ching vs. Sunny Friend Environmental | Feng Ching vs. U Media Communications |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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