Correlation Between Castles Technology and FIT Holding
Can any of the company-specific risk be diversified away by investing in both Castles Technology and FIT Holding 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 Castles Technology and FIT Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castles Technology Co and FIT Holding Co, you can compare the effects of market volatilities on Castles Technology and FIT Holding 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 Castles Technology with a short position of FIT Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castles Technology and FIT Holding.
Diversification Opportunities for Castles Technology and FIT Holding
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Castles and FIT is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Castles Technology Co and FIT Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT Holding and Castles Technology 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 Castles Technology Co are associated (or correlated) with FIT Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT Holding has no effect on the direction of Castles Technology i.e., Castles Technology and FIT Holding go up and down completely randomly.
Pair Corralation between Castles Technology and FIT Holding
Assuming the 90 days trading horizon Castles Technology is expected to generate 2.22 times less return on investment than FIT Holding. In addition to that, Castles Technology is 1.08 times more volatile than FIT Holding Co. It trades about 0.03 of its total potential returns per unit of risk. FIT Holding Co is currently generating about 0.08 per unit of volatility. If you would invest 2,617 in FIT Holding Co on October 14, 2024 and sell it today you would earn a total of 3,203 from holding FIT Holding Co or generate 122.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Castles Technology Co vs. FIT Holding Co
Performance |
| Timeline |
| Castles Technology |
| FIT Holding |
Castles Technology and FIT Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castles Technology and FIT Holding
The main advantage of trading using opposite Castles Technology and FIT Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castles Technology position performs unexpectedly, FIT Holding 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 FIT Holding will offset losses from the drop in FIT Holding's long position.| Castles Technology vs. AVerMedia Technologies | Castles Technology vs. Min Aik Technology | Castles Technology vs. Jean Co | Castles Technology vs. Uniform Industrial Corp |
| FIT Holding vs. Taiwan Semiconductor Manufacturing | FIT Holding vs. MediaTek | FIT Holding vs. United Microelectronics | FIT Holding vs. Novatek Microelectronics Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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