Correlation Between Est Global and FDC International
Can any of the company-specific risk be diversified away by investing in both Est Global and FDC International 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 Est Global and FDC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Est Global Apparel and FDC International Hotels, you can compare the effects of market volatilities on Est Global and FDC International 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 Est Global with a short position of FDC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and FDC International.
Diversification Opportunities for Est Global and FDC International
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Est and FDC is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and FDC International Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDC International Hotels and Est Global 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 Est Global Apparel are associated (or correlated) with FDC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDC International Hotels has no effect on the direction of Est Global i.e., Est Global and FDC International go up and down completely randomly.
Pair Corralation between Est Global and FDC International
Assuming the 90 days trading horizon Est Global Apparel is expected to generate 1.05 times more return on investment than FDC International. However, Est Global is 1.05 times more volatile than FDC International Hotels. It trades about 0.03 of its potential returns per unit of risk. FDC International Hotels is currently generating about -0.02 per unit of risk. If you would invest 1,483 in Est Global Apparel on November 28, 2024 and sell it today you would earn a total of 372.00 from holding Est Global Apparel or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Est Global Apparel vs. FDC International Hotels
Performance |
| Timeline |
| Est Global Apparel |
| FDC International Hotels |
Est Global and FDC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Est Global and FDC International
The main advantage of trading using opposite Est Global and FDC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Est Global position performs unexpectedly, FDC International 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 FDC International will offset losses from the drop in FDC International's long position.| Est Global vs. Farglory FTZ Investment | Est Global vs. Hunya Foods Co | Est Global vs. Mechema Chemicals Int | Est Global vs. Sports Gear Co |
| FDC International vs. Formosa International Hotels | FDC International vs. My Humble House | FDC International vs. Wanhwa Enterprise Co | FDC International vs. Gourmet Master Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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