Correlation Between FocalTech Systems and O TA
Can any of the company-specific risk be diversified away by investing in both FocalTech Systems and O TA 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 O TA 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 O TA Precision Industry, you can compare the effects of market volatilities on FocalTech Systems and O TA 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 O TA. Check out your portfolio center. Please also check ongoing floating volatility patterns of FocalTech Systems and O TA.
Diversification Opportunities for FocalTech Systems and O TA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FocalTech and 8924 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding FocalTech Systems Co and O TA Precision Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O TA Precision 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 O TA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O TA Precision has no effect on the direction of FocalTech Systems i.e., FocalTech Systems and O TA go up and down completely randomly.
Pair Corralation between FocalTech Systems and O TA
Assuming the 90 days trading horizon FocalTech Systems Co is expected to generate 4.92 times more return on investment than O TA. However, FocalTech Systems is 4.92 times more volatile than O TA Precision Industry. It trades about 0.11 of its potential returns per unit of risk. O TA Precision Industry is currently generating about -0.37 per unit of risk. If you would invest 8,630 in FocalTech Systems Co on August 29, 2024 and sell it today you would earn a total of 340.00 from holding FocalTech Systems Co or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FocalTech Systems Co vs. O TA Precision Industry
Performance |
| Timeline |
| FocalTech Systems |
| O TA Precision |
FocalTech Systems and O TA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FocalTech Systems and O TA
The main advantage of trading using opposite FocalTech Systems and O TA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FocalTech Systems position performs unexpectedly, O TA 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 O TA will offset losses from the drop in O TA'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 |
| O TA vs. Advanced International Multitech | O TA vs. Dynamic Precision Industry | O TA vs. Greatek Electronics | O TA vs. Qisda Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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