Correlation Between Farglory Land and Run Long
Can any of the company-specific risk be diversified away by investing in both Farglory Land and Run Long 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 Farglory Land and Run Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory Land Development and Run Long Construction, you can compare the effects of market volatilities on Farglory Land and Run Long 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 Farglory Land with a short position of Run Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory Land and Run Long.
Diversification Opportunities for Farglory Land and Run Long
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Farglory and Run is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Farglory Land Development and Run Long Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Run Long Construction and Farglory Land 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 Farglory Land Development are associated (or correlated) with Run Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Run Long Construction has no effect on the direction of Farglory Land i.e., Farglory Land and Run Long go up and down completely randomly.
Pair Corralation between Farglory Land and Run Long
Assuming the 90 days trading horizon Farglory Land Development is expected to generate 0.3 times more return on investment than Run Long. However, Farglory Land Development is 3.36 times less risky than Run Long. It trades about -0.16 of its potential returns per unit of risk. Run Long Construction is currently generating about -0.17 per unit of risk. If you would invest 8,110 in Farglory Land Development on August 30, 2024 and sell it today you would lose (1,790) from holding Farglory Land Development or give up 22.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory Land Development vs. Run Long Construction
Performance |
| Timeline |
| Farglory Land Development |
| Run Long Construction |
Farglory Land and Run Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory Land and Run Long
The main advantage of trading using opposite Farglory Land and Run Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory Land position performs unexpectedly, Run Long 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 Run Long will offset losses from the drop in Run Long's long position.| Farglory Land vs. Highwealth Construction Corp | Farglory Land vs. Huaku Development Co | Farglory Land vs. Chong Hong Construction | Farglory Land vs. Asia Cement Corp |
| Run Long vs. Highwealth Construction Corp | Run Long vs. Chong Hong Construction | Run Long vs. Farglory Land Development | Run Long vs. Huaku Development Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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