Correlation Between Farglory FTZ and Medigen Biotechnology
Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Medigen Biotechnology 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 Medigen Biotechnology 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 Medigen Biotechnology, you can compare the effects of market volatilities on Farglory FTZ and Medigen Biotechnology 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 Medigen Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Medigen Biotechnology.
Diversification Opportunities for Farglory FTZ and Medigen Biotechnology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Farglory and Medigen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology 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 Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Medigen Biotechnology go up and down completely randomly.
Pair Corralation between Farglory FTZ and Medigen Biotechnology
Assuming the 90 days trading horizon Farglory FTZ Investment is expected to generate 0.49 times more return on investment than Medigen Biotechnology. However, Farglory FTZ Investment is 2.04 times less risky than Medigen Biotechnology. It trades about 0.16 of its potential returns per unit of risk. Medigen Biotechnology is currently generating about -0.03 per unit of risk. If you would invest 4,240 in Farglory FTZ Investment on December 1, 2024 and sell it today you would earn a total of 150.00 from holding Farglory FTZ Investment or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farglory FTZ Investment vs. Medigen Biotechnology
Performance |
| Timeline |
| Farglory FTZ Investment |
| Medigen Biotechnology |
Farglory FTZ and Medigen Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farglory FTZ and Medigen Biotechnology
The main advantage of trading using opposite Farglory FTZ and Medigen Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farglory FTZ position performs unexpectedly, Medigen Biotechnology 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 Medigen Biotechnology will offset losses from the drop in Medigen Biotechnology's 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 |
| Medigen Biotechnology vs. China Development Financial | Medigen Biotechnology vs. Chi Sheng Chemical | Medigen Biotechnology vs. Kings Town Bank | Medigen Biotechnology vs. Phoenix Silicon International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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