Correlation Between Est Global and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Est Global and Ching Feng 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 Ching Feng 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 Ching Feng Home, you can compare the effects of market volatilities on Est Global and Ching Feng 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 Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Ching Feng.
Diversification Opportunities for Est Global and Ching Feng
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Est and Ching is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home 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 Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Est Global i.e., Est Global and Ching Feng go up and down completely randomly.
Pair Corralation between Est Global and Ching Feng
Assuming the 90 days trading horizon Est Global Apparel is expected to generate 2.32 times more return on investment than Ching Feng. However, Est Global is 2.32 times more volatile than Ching Feng Home. It trades about 0.0 of its potential returns per unit of risk. Ching Feng Home is currently generating about -0.06 per unit of risk. If you would invest 1,730 in Est Global Apparel on October 24, 2024 and sell it today you would lose (15.00) from holding Est Global Apparel or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Est Global Apparel vs. Ching Feng Home
Performance |
| Timeline |
| Est Global Apparel |
| Ching Feng Home |
Est Global and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Est Global and Ching Feng
The main advantage of trading using opposite Est Global and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Est Global position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng's long position.| Est Global vs. Far Eastern New | Est Global vs. Eclat Textile Co | Est Global vs. Ruentex Industries | Est Global vs. Formosa Taffeta Co |
| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
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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