Correlation Between Farglory FTZ and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Yang Ming 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 Yang Ming 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 Yang Ming Marine, you can compare the effects of market volatilities on Farglory FTZ and Yang Ming 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 Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Yang Ming.
Diversification Opportunities for Farglory FTZ and Yang Ming
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farglory and Yang is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine 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 Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Yang Ming go up and down completely randomly.
Pair Corralation between Farglory FTZ and Yang Ming
Assuming the 90 days trading horizon Farglory FTZ is expected to generate 1.97 times less return on investment than Yang Ming. But when comparing it to its historical volatility, Farglory FTZ Investment is 2.11 times less risky than Yang Ming. It trades about 0.17 of its potential returns per unit of risk. Yang Ming Marine is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,210 in Yang Ming Marine on September 13, 2024 and sell it today you would earn a total of 710.00 from holding Yang Ming Marine or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Yang Ming Marine
Performance |
| Timeline |
| Farglory FTZ Investment |
| Yang Ming Marine |
Farglory FTZ and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Yang Ming
The main advantage of trading using opposite Farglory FTZ and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, Yang Ming 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 Yang Ming will offset losses from the drop in Yang Ming's long position.| Farglory FTZ vs. Yang Ming Marine | Farglory FTZ vs. Wan Hai Lines | Farglory FTZ vs. U Ming Marine Transport | Farglory FTZ vs. Taiwan Navigation Co |
| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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