Correlation Between Far EasTone and An Shin
Can any of the company-specific risk be diversified away by investing in both Far EasTone and An Shin 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 Far EasTone and An Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Far EasTone Telecommunications and An Shin Food Services, you can compare the effects of market volatilities on Far EasTone and An Shin 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 Far EasTone with a short position of An Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Far EasTone and An Shin.
Diversification Opportunities for Far EasTone and An Shin
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Far and 1259 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Far EasTone Telecommunications and An Shin Food Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Shin Food and Far EasTone 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 Far EasTone Telecommunications are associated (or correlated) with An Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Shin Food has no effect on the direction of Far EasTone i.e., Far EasTone and An Shin go up and down completely randomly.
Pair Corralation between Far EasTone and An Shin
Assuming the 90 days trading horizon Far EasTone is expected to generate 51.97 times less return on investment than An Shin. But when comparing it to its historical volatility, Far EasTone Telecommunications is 1.11 times less risky than An Shin. It trades about 0.0 of its potential returns per unit of risk. An Shin Food Services is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6,280 in An Shin Food Services on November 28, 2024 and sell it today you would earn a total of 170.00 from holding An Shin Food Services or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Far EasTone Telecommunications vs. An Shin Food Services
Performance |
| Timeline |
| Far EasTone Telecomm |
| An Shin Food |
Far EasTone and An Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Far EasTone and An Shin
The main advantage of trading using opposite Far EasTone and An Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Far EasTone position performs unexpectedly, An Shin 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 An Shin will offset losses from the drop in An Shin's long position.| Far EasTone vs. Taiwan Mobile Co | Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. President Chain Store | Far EasTone vs. Formosa Petrochemical Corp |
| An Shin vs. International CSRC Investment | An Shin vs. Onyx Healthcare | An Shin vs. Taiwan Speciality Chemicals | An Shin vs. China Airlines |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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