Correlation Between Far EasTone and Gigastorage Corp
Can any of the company-specific risk be diversified away by investing in both Far EasTone and Gigastorage Corp 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 Gigastorage Corp 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 Gigastorage Corp, you can compare the effects of market volatilities on Far EasTone and Gigastorage Corp 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 Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Far EasTone and Gigastorage Corp.
Diversification Opportunities for Far EasTone and Gigastorage Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Far and Gigastorage is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Far EasTone Telecommunications and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp 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 Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Far EasTone i.e., Far EasTone and Gigastorage Corp go up and down completely randomly.
Pair Corralation between Far EasTone and Gigastorage Corp
Assuming the 90 days trading horizon Far EasTone Telecommunications is expected to generate 0.56 times more return on investment than Gigastorage Corp. However, Far EasTone Telecommunications is 1.78 times less risky than Gigastorage Corp. It trades about 0.04 of its potential returns per unit of risk. Gigastorage Corp is currently generating about -0.2 per unit of risk. If you would invest 8,860 in Far EasTone Telecommunications on August 26, 2024 and sell it today you would earn a total of 60.00 from holding Far EasTone Telecommunications or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Far EasTone Telecommunications vs. Gigastorage Corp
Performance |
| Timeline |
| Far EasTone Telecomm |
| Gigastorage Corp |
Far EasTone and Gigastorage Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Far EasTone and Gigastorage Corp
The main advantage of trading using opposite Far EasTone and Gigastorage Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Far EasTone position performs unexpectedly, Gigastorage Corp 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 Gigastorage Corp will offset losses from the drop in Gigastorage Corp's long position.| Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. CTBC Financial Holding | Far EasTone vs. Fubon Financial Holding | Far EasTone vs. President Chain Store |
| Gigastorage Corp vs. Unitech Computer Co | Gigastorage Corp vs. Jetwell Computer Co | Gigastorage Corp vs. Compal Broadband Networks | Gigastorage Corp vs. Far EasTone Telecommunications |
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.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |