Correlation Between Far EasTone and MedFirst Healthcare
Can any of the company-specific risk be diversified away by investing in both Far EasTone and MedFirst Healthcare 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 MedFirst Healthcare 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 MedFirst Healthcare Services, you can compare the effects of market volatilities on Far EasTone and MedFirst Healthcare 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 MedFirst Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Far EasTone and MedFirst Healthcare.
Diversification Opportunities for Far EasTone and MedFirst Healthcare
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Far and MedFirst is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Far EasTone Telecommunications and MedFirst Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedFirst Healthcare 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 MedFirst Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedFirst Healthcare has no effect on the direction of Far EasTone i.e., Far EasTone and MedFirst Healthcare go up and down completely randomly.
Pair Corralation between Far EasTone and MedFirst Healthcare
Assuming the 90 days trading horizon Far EasTone Telecommunications is expected to under-perform the MedFirst Healthcare. In addition to that, Far EasTone is 1.07 times more volatile than MedFirst Healthcare Services. It trades about -0.02 of its total potential returns per unit of risk. MedFirst Healthcare Services is currently generating about 0.21 per unit of volatility. If you would invest 6,420 in MedFirst Healthcare Services on October 21, 2024 and sell it today you would earn a total of 260.00 from holding MedFirst Healthcare Services or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Far EasTone Telecommunications vs. MedFirst Healthcare Services
Performance |
| Timeline |
| Far EasTone Telecomm |
| MedFirst Healthcare |
Far EasTone and MedFirst Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Far EasTone and MedFirst Healthcare
The main advantage of trading using opposite Far EasTone and MedFirst Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Far EasTone position performs unexpectedly, MedFirst Healthcare 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 MedFirst Healthcare will offset losses from the drop in MedFirst Healthcare'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 |
| MedFirst Healthcare vs. Jetway Information Co | MedFirst Healthcare vs. Evergreen International Storage | MedFirst Healthcare vs. Quanta Storage | MedFirst Healthcare vs. Tai Tung Communication |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |