Correlation Between Farglory FTZ and YuantaP Shares
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and YuantaP Shares 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 FTZ and YuantaP Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farglory FTZ Investment and YuantaP shares Taiwan Mid Cap, you can compare the effects of market volatilities on Farglory FTZ and YuantaP Shares 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 FTZ with a short position of YuantaP Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and YuantaP Shares.
Diversification Opportunities for Farglory FTZ and YuantaP Shares
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Farglory and YuantaP is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and YuantaP shares Taiwan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YuantaP shares Taiwan and Farglory FTZ 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 FTZ Investment are associated (or correlated) with YuantaP Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YuantaP shares Taiwan has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and YuantaP Shares go up and down completely randomly.
Pair Corralation between Farglory FTZ and YuantaP Shares
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to generate 1.01 times more return on investment than YuantaP Shares. However, Farglory FTZ is 1.01 times more volatile than YuantaP shares Taiwan Mid Cap. It trades about 0.06 of its potential returns per unit of risk. YuantaP shares Taiwan Mid Cap is currently generating about -0.18 per unit of risk. If you would invest 4,400 in Farglory FTZ Investment on August 30, 2024 and sell it today you would earn a total of 65.00 from holding Farglory FTZ Investment or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Farglory FTZ Investment vs. YuantaP shares Taiwan Mid Cap
Performance |
| Timeline |
| Farglory FTZ Investment |
| YuantaP shares Taiwan |
Farglory FTZ and YuantaP Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and YuantaP Shares
The main advantage of trading using opposite Farglory FTZ and YuantaP Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, YuantaP Shares 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 YuantaP Shares will offset losses from the drop in YuantaP Shares' long position.| Farglory FTZ vs. Evergreen International Storage | Farglory FTZ vs. China Container Terminal | Farglory FTZ vs. Sincere Navigation Corp | Farglory FTZ vs. CSBC Corp Taiwan |
| YuantaP Shares vs. Yuanta Daily Taiwan | YuantaP Shares vs. Symtek Automation Asia | YuantaP Shares vs. CTCI Corp | YuantaP Shares vs. Information Technology Total |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |