Correlation Between Tainet Communication and Farglory FTZ
Can any of the company-specific risk be diversified away by investing in both Tainet Communication and Farglory FTZ 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 Tainet Communication and Farglory FTZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tainet Communication System and Farglory FTZ Investment, you can compare the effects of market volatilities on Tainet Communication and Farglory FTZ 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 Tainet Communication with a short position of Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tainet Communication and Farglory FTZ.
Diversification Opportunities for Tainet Communication and Farglory FTZ
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tainet and Farglory is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment and Tainet Communication 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 Tainet Communication System are associated (or correlated) with Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of Tainet Communication i.e., Tainet Communication and Farglory FTZ go up and down completely randomly.
Pair Corralation between Tainet Communication and Farglory FTZ
Assuming the 90 days trading horizon Tainet Communication System is expected to generate 1.29 times more return on investment than Farglory FTZ. However, Tainet Communication is 1.29 times more volatile than Farglory FTZ Investment. It trades about -0.06 of its potential returns per unit of risk. Farglory FTZ Investment is currently generating about -0.08 per unit of risk. If you would invest 10,000 in Tainet Communication System on August 29, 2024 and sell it today you would lose (1,960) from holding Tainet Communication System or give up 19.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tainet Communication System vs. Farglory FTZ Investment
Performance |
| Timeline |
| Tainet Communication |
| Farglory FTZ Investment |
Tainet Communication and Farglory FTZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tainet Communication and Farglory FTZ
The main advantage of trading using opposite Tainet Communication and Farglory FTZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tainet Communication position performs unexpectedly, Farglory FTZ 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 Farglory FTZ will offset losses from the drop in Farglory FTZ's long position.| Tainet Communication vs. Accton Technology Corp | Tainet Communication vs. Wistron NeWeb Corp | Tainet Communication vs. Arcadyan Technology Corp | Tainet Communication vs. Sercomm Corp |
| Farglory FTZ vs. Yulon Motor Co | Farglory FTZ vs. Far Eastern Department | Farglory FTZ vs. China Steel Corp | Farglory FTZ vs. Chang Hwa Commercial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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