Correlation Between Sunfon Construction and Foxconn Technology
Can any of the company-specific risk be diversified away by investing in both Sunfon Construction and Foxconn Technology 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 Sunfon Construction and Foxconn Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunfon Construction Co and Foxconn Technology Co, you can compare the effects of market volatilities on Sunfon Construction and Foxconn Technology 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 Sunfon Construction with a short position of Foxconn Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfon Construction and Foxconn Technology.
Diversification Opportunities for Sunfon Construction and Foxconn Technology
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunfon and Foxconn is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sunfon Construction Co and Foxconn Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foxconn Technology and Sunfon Construction 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 Sunfon Construction Co are associated (or correlated) with Foxconn Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foxconn Technology has no effect on the direction of Sunfon Construction i.e., Sunfon Construction and Foxconn Technology go up and down completely randomly.
Pair Corralation between Sunfon Construction and Foxconn Technology
Assuming the 90 days trading horizon Sunfon Construction is expected to generate 2.36 times less return on investment than Foxconn Technology. But when comparing it to its historical volatility, Sunfon Construction Co is 1.22 times less risky than Foxconn Technology. It trades about 0.03 of its potential returns per unit of risk. Foxconn Technology Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,650 in Foxconn Technology Co on August 27, 2024 and sell it today you would earn a total of 2,570 from holding Foxconn Technology Co or generate 45.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunfon Construction Co vs. Foxconn Technology Co
Performance |
| Timeline |
| Sunfon Construction |
| Foxconn Technology |
Sunfon Construction and Foxconn Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfon Construction and Foxconn Technology
The main advantage of trading using opposite Sunfon Construction and Foxconn Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfon Construction position performs unexpectedly, Foxconn Technology 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 Foxconn Technology will offset losses from the drop in Foxconn Technology's long position.| Sunfon Construction vs. Run Long Construction | Sunfon Construction vs. Chong Hong Construction | Sunfon Construction vs. JSL Construction Development | Sunfon Construction vs. Delpha Construction Co |
| Foxconn Technology vs. Hon Hai Precision | Foxconn Technology vs. Pegatron Corp | Foxconn Technology vs. MediaTek | Foxconn Technology vs. Hon Hai Precision |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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