Correlation Between FocalTech Systems and Micro Star
Can any of the company-specific risk be diversified away by investing in both FocalTech Systems and Micro Star 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 FocalTech Systems and Micro Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FocalTech Systems Co and Micro Star International Co, you can compare the effects of market volatilities on FocalTech Systems and Micro Star 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 FocalTech Systems with a short position of Micro Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of FocalTech Systems and Micro Star.
Diversification Opportunities for FocalTech Systems and Micro Star
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FocalTech and Micro is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding FocalTech Systems Co and Micro Star International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Star Internati and FocalTech Systems 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 FocalTech Systems Co are associated (or correlated) with Micro Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Star Internati has no effect on the direction of FocalTech Systems i.e., FocalTech Systems and Micro Star go up and down completely randomly.
Pair Corralation between FocalTech Systems and Micro Star
Assuming the 90 days trading horizon FocalTech Systems Co is expected to generate 0.93 times more return on investment than Micro Star. However, FocalTech Systems Co is 1.08 times less risky than Micro Star. It trades about 0.12 of its potential returns per unit of risk. Micro Star International Co is currently generating about -0.12 per unit of risk. If you would invest 8,630 in FocalTech Systems Co on August 27, 2024 and sell it today you would earn a total of 350.00 from holding FocalTech Systems Co or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FocalTech Systems Co vs. Micro Star International Co
Performance |
| Timeline |
| FocalTech Systems |
| Micro Star Internati |
FocalTech Systems and Micro Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FocalTech Systems and Micro Star
The main advantage of trading using opposite FocalTech Systems and Micro Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FocalTech Systems position performs unexpectedly, Micro Star 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 Micro Star will offset losses from the drop in Micro Star's long position.| FocalTech Systems vs. Novatek Microelectronics Corp | FocalTech Systems vs. Sitronix Technology Corp | FocalTech Systems vs. Elan Microelectronics Corp | FocalTech Systems vs. Global Unichip Corp |
| Micro Star vs. Novatek Microelectronics Corp | Micro Star vs. Quanta Computer | Micro Star vs. United Microelectronics |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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