Correlation Between Founding Construction and Galaxy Software
Can any of the company-specific risk be diversified away by investing in both Founding Construction and Galaxy Software 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 Founding Construction and Galaxy Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Founding Construction Development and Galaxy Software Services, you can compare the effects of market volatilities on Founding Construction and Galaxy Software 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 Founding Construction with a short position of Galaxy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Founding Construction and Galaxy Software.
Diversification Opportunities for Founding Construction and Galaxy Software
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Founding and Galaxy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Founding Construction Developm and Galaxy Software Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Software Services and Founding 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 Founding Construction Development are associated (or correlated) with Galaxy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Software Services has no effect on the direction of Founding Construction i.e., Founding Construction and Galaxy Software go up and down completely randomly.
Pair Corralation between Founding Construction and Galaxy Software
Assuming the 90 days trading horizon Founding Construction Development is expected to generate 0.48 times more return on investment than Galaxy Software. However, Founding Construction Development is 2.09 times less risky than Galaxy Software. It trades about 0.1 of its potential returns per unit of risk. Galaxy Software Services is currently generating about -0.01 per unit of risk. If you would invest 2,040 in Founding Construction Development on August 30, 2024 and sell it today you would earn a total of 50.00 from holding Founding Construction Development or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Founding Construction Developm vs. Galaxy Software Services
Performance |
| Timeline |
| Founding Construction |
| Galaxy Software Services |
Founding Construction and Galaxy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Founding Construction and Galaxy Software
The main advantage of trading using opposite Founding Construction and Galaxy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Founding Construction position performs unexpectedly, Galaxy Software 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 Galaxy Software will offset losses from the drop in Galaxy Software's long position.| Founding Construction vs. Tainan Spinning Co | Founding Construction vs. Carnival Industrial Corp | Founding Construction vs. Symtek Automation Asia | Founding Construction vs. CTCI Corp |
| Galaxy Software vs. YuantaP shares Taiwan Electronics | Galaxy Software vs. YuantaP shares Taiwan Top | Galaxy Software vs. YuantaP shares Taiwan Mid Cap | Galaxy Software vs. Fubon MSCI Taiwan |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |