Correlation Between Golden Friends and Fittech
Can any of the company-specific risk be diversified away by investing in both Golden Friends and Fittech 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 Golden Friends and Fittech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Friends and Fittech Co, you can compare the effects of market volatilities on Golden Friends and Fittech 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 Golden Friends with a short position of Fittech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Friends and Fittech.
Diversification Opportunities for Golden Friends and Fittech
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Fittech is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Golden Friends and Fittech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fittech and Golden Friends 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 Golden Friends are associated (or correlated) with Fittech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fittech has no effect on the direction of Golden Friends i.e., Golden Friends and Fittech go up and down completely randomly.
Pair Corralation between Golden Friends and Fittech
Assuming the 90 days trading horizon Golden Friends is expected to generate 44.36 times less return on investment than Fittech. But when comparing it to its historical volatility, Golden Friends is 4.4 times less risky than Fittech. It trades about 0.0 of its potential returns per unit of risk. Fittech Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16,500 in Fittech Co on August 29, 2024 and sell it today you would earn a total of 300.00 from holding Fittech Co or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Friends vs. Fittech Co
Performance |
| Timeline |
| Golden Friends |
| Fittech |
Golden Friends and Fittech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Friends and Fittech
The main advantage of trading using opposite Golden Friends and Fittech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Friends position performs unexpectedly, Fittech 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 Fittech will offset losses from the drop in Fittech's long position.| Golden Friends vs. Sunonwealth Electric Machine | Golden Friends vs. Rechi Precision Co | Golden Friends vs. C Sun Manufacturing | Golden Friends vs. Symtek Automation Asia |
| Fittech vs. Sitronix Technology Corp | Fittech vs. Taiwan Surface Mounting | Fittech vs. Nan Ya Printed | Fittech vs. Visual Photonics Epitaxy |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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